using loopholes to reveal the marginal cost of regulation the case of fuel economy standards estimating the cost of regulation is difficult firms sometimes reveal costs indirectly however when they exploit loopholes to avoid regulation we apply this insight to fuel economy standards for automobiles these standards feature a loophole that gives automakers a bonus when they equip a vehicle with flexible fuel capacity profitmaximizing automakers will equate the marginal cost of compliance using the loophole which is observable with the unobservable costs of strategies that genuinely improve fuel economy based on this insight we estimate that tightening standards by one mile per gallon would have cost automakers just 9 27 per vehicle in recent years jel l51 l62 q48

identifying profitable self service markets a test in gasoline retailing the increased presence of self service products is explored a model is constructed that views service as an attribute of a product bundle that can be separated to create a self service substitute in terms of market elasticities and revenues we suggest an analytical measure of a seller s incentive to debundle service for retail gasoline markets we empirically estimate with reduced form equations the own and cross price elasticities of full and self service demand across standard metropolitan statistical areas in the united states to show that regional differences in sales of self service gasoline are explained by our measure

foreign exchange shocks and gasoline consumption abstract in an open economy the foreign exchange rate fer influences incentives for the cross border shopping of gasoline as well as the opportunity cost of using vehicles and the relative attractiveness of home versus foreign travel using monthly regional level data of gasoline consumption in iran we estimate the impact of exchange rate shocks both in level and volatility on gasoline demand we find that positive exchange rate shocks have a negative impact on total gasoline consumption as well as on vehicle users demand in both short run and long run furthermore we find that in the periods that fer is less volatile the responsiveness of gasoline demand to a change in fer is more pronounced

are there multiple bubbles in the ethanol gasoline price ratio of brazil this paper tests for the existence of bubbles in the ethanol gasoline price ratio in brazil from 2000 to 2012 using right tailed adf tests results suggest the existence of two bubbles one which has already burst during the re election of president lula and one which has been ongoing since 2010 thus corroborating empirical and anecdotal evidence in the brazilian sugarcane industry freezing gasoline prices not only depressed ethanol prices but also depressed investments in new sugarcane crops and distillation plants

factors affecting drivers willingness to pay for biofuels the case of italy biofuels represent a promising alternative to substitute fossil fuels and given the relevance of environmental impacts of the transport sector policy initiatives worldwide aim at supporting the shift towards such cleaner energy source acknowledging the crucial role that biofuels will play in years to come in the energetic paradigm the study aims at investigating key determinants of drivers willingness to pay for biofuels focusing on a sample of 260 individuals from northern italy n 260 in line with recent research on consumer behavior socio demographics are not good predictors of drivers willingness to pay surprisingly on the other hand knowledge of the topic is negatively correlated to willingness to pay so that the more people know about biofuels the less they are willing to pay a premium price moreover certification is not an effective tool to convince drivers of the eco friendliness of biofuels hence spurring willingness to pay possible explanations of the research findings as well as policy implications are discussed in detail along with suggestions for future research on the topic

simulation of price controls for different grade of gasoline the case of indonesia abstract a gasoline subsidy is one of the most prevalent strategies for distributing welfare to the people in oil producing countries however well intentioned the policy will distort the gasoline market with the resulting inefficiencies furthermore the gasoline subsidy takes a great amount of government s budget arguably these funds could be spent elsewhere with a greater impact on economic growth these governments are aware of the cost of such a policy yet face difficulties in removing the policy because of strong resistance from the public this paper looks at the unique case of indonesia that only provides a subsidy for regular gasoline and in turn proposes an alternative policy that introduces a subsidy for premium gasoline at a lower rate to reduce the overall gasoline subsidy cost there has yet to be any research that simulates price controls for gasoline with different grades the aggregate demand for gasoline in indonesia is replicated using a translog cost calibration approach simulations based on the calibrated demand are then performed and the results confirm the existence of potential savings that are largely determined by the cross price elasticities between regular and premium gasoline the benchmark scenario based on a recent study of substitutability between gasoline by grades results in an 11 5 reduction in subsidy cost of around 950 million usd with a subsidy rate of rp 2254 liter furthermore the optimal rate of subsidy for premium gasoline results in a reduction of inefficiency as consumers welfare increase by 6 8 trillion rupiahs or 560 million usd

managing basis risk with multiscale index insurance agricultural index insurance indemnifies a farmer against losses based on an index that is correlated with but not identical to her or his individual outcomes in practice the level of correlation may be modest exposing insured farmers to residual basis risk in this article we study the impact of basis risk on the demand for index insurance under risk and compound risk aversion we simulate the impact of basis risk on the demand for index insurance by malian cotton farmers using data from field experiments that reveal the distributions of risk and compound risk aversion the analysis shows that compound risk aversion depresses demand for a conventional index insurance contract some 13 percentage points below what would be predicted based on risk aversion alone we then analyze an innovative multiscale index insurance contract that reduces basis risk relative to conventional single scale index insurance contract simulations indicate that demand for this multiscale contract would be some 40 higher than the demand for an equivalently priced conventional contract in the population of malian cotton farmers finally we report and discuss the actual uptake of a multiscale contract introduced in mali

interdependent international relations and the expansion of ethanol production and consumption the brazilian perspective abstract the global production and consumption of ethanol are expected to increase the growing interdependence of markets and nations producers and consumers of biofuels has led actors to seek and devise mechanisms intended to develop the sector this paper aims to analyze the interdependent international relations between brazil and other ethanol biofuel producer and consumer countries to do so the paper explores the theory of complex interdependence and the game theory a quali quantitative study was conducted involving the application of two questionnaires to experts on biofuels and documentary analysis aided by qda miner software the results show that brazil shares highly interdependent relations with the united states an intermediate degree of interdependence with europe and a low degree of interdependence with china the dimensions of those interdependent relations can be ranked according to importance in the following order first the political then the economic technical and finally the social environmental dimensions a number of actions can be envisaged that could lead ethanol to achieve an increasingly strategic position in the diversification of the energy matrix in different countries technological efforts to improve production efficiency the creation of globally integrated policies designed to provide security and develop the production and consumption infrastructure the reduction of international tariffs on the product and the transformation of ethanol into a global commodity with a large number of countries buying and selling the product this paper faced the challenge of integrating approaches and concepts from two complex theoretical areas complex interdependence theory and game theory the research methodology and the insights gained from the ethanol case contribute to the literature on the applicability of these two theoretical approaches

the cross cultural research imperative the need to balance cross national and intra national diversity this paper provides a brief overview of the evolution of comparative management theories paradigms and highlights the contribution of the cross vergence construct despite progress most studies of work values across countries continue to suffer from two primary limitations the first is the fallacious assumption of cultural homogeneity with nations given the growing diversity of the workforce within country intra national variations can often be as significant as cross national differences the second is the fallacious assumption of cultural stability over time since cultures evolve albeit slowly it is important to take these changes over time into consideration and be aware of the paradoxes inherent within any given society hence the paper calls for the need to balance cross national and intra national diversity in order to truly understand cross cultural phenomena and thus further improve the quality of cross cultural research

the economics of poverty traps and persistent poverty an asset based approach abstract longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty while a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty this paper develops an asset based approach to poverty analysis that makes it possible to distinguish deep rooted persistent structural poverty from poverty that passes naturally with time due to systemic growth processes drawing on the economic theory of poverty traps and bifurcated accumulation strategies this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long term persistent structural poverty as well as relevant extensions of the popular foster greer thorbecke class of poverty measures the paper closes with reflections on how asset based poverty can be used to underwrite the design of persistent poverty reduction strategies

differences in managerial values a study of u s hong kong and prc managers in this study of convergence divergence of managerial values four western developed measures machiavellianism locus of control intolerance of ambiguity and dogmatism and the four dimensions of the eastern developed chinese value survey confucian dynamism human heartedness integration and moral discipline were the measures used the findings indicate that often times both culture and the business environment interact to create a unique set of managerial values in a country

the pervasive effects of family on entrepreneurship toward a family embeddedness perspective families and businesses have often been treated as naturally separate institutions whereas we argue that they are inextricably intertwined long term changes in family composition and in the roles and relations of family members have produced families in north america that are growing smaller and losing many of their previous role relationships such transformations in the institution of the family have implications for the emergence of new business opportunities opportunity recognition business start up decisions and the resource mobilization process we suggest that entrepreneurship scholars would benefit from a family embeddedness perspective on new venture creation d 2003 elsevier science inc all rights reserved

the renewable fuel standard in competitive equilibrium market and welfare effects we construct a tractable multi market equilibrium model designed to evaluate alternative biofuel policies the model integrates the u s agricultural sector with the energy sector and it explicitly considers both u s ethanol and biodiesel production the model provides a structural representation of the renewable fuel standard rfs policies and it uses the arbitrage conditions defining the core value of renewable identification number prices to identify the relevant competitive equilibrium conditions the model is parameterized based on elasticities and technical coefficients from the literature to represent observed 2015 data the model is simulated to analyze alternative scenarios including repeal of the rfs projected 2022 rfs mandates and optimal second best mandates the results confirm that the current rfs program considerably benefits the agriculture sector but also leads to overall welfare gains for the united states mostly via beneficial terms of trade effects implementation of projected 2022 mandates which would require further expansion of biodiesel production would lead to a considerable welfare loss relative to 2015 mandate levels constrained second best optimal mandates would entail more corn based ethanol and less biodiesel than currently mandated

intra cultural variation evidence and implications for international business this paper discusses the methodological and theoretical significance of intra cultural variation icv the population distribution of a characteristic within a culture a monte carlo study shows that icv has substantial influence on the statistical power of cross cultural tests therefore studying icv is methodologically important if we are to understand inconsistent findings and design cross cultural studies with enough statistical power moreover an examination of the cultural means and icvs of 42 cultures shows that icv is as large as the variation of cultural means across cultures and its relationship to cultural means is not definite a model based on multiple disciplines is proposed to cast icv in a nomological net and to illuminate several avenues for future research practical implications are also discussed

a ban on one is a boon for the other strict gasoline content rules and implicit ethanol blending mandates ethanol and methyl tertiary butyl ether mtbe were close substitutes in the gasoline additives market until mtbe was banned due to the concerns about groundwater contamination leading to a sudden and dramatic substitution toward ethanol as an alternative oxygenate and octane booster we use variation in the timing of mtbe bans across states to identify their effects on gasoline prices we find that state bans increased reformulated gasoline prices by 3 6 cents in non midwestern states for which the bans were binding with larger impacts during times of high ethanol prices relative to mtbe and crude oil we find qualitatively similar yet smaller effects for conventional gasoline we argue on the basis of a simple conceptual model and supporting empirical evidence that these bans functioned as implicit ethanol blending mandates in areas that were previously using mtbe to comply with strict environmental constraints overall our results are consistent with the theoretical prediction that mandating a minimum market share for a more costly alternative fuel either directly or implicitly through a ban on the preferred conventional fuel will inevitably increase fuel prices in a competitive market

religious beliefs gambling attitudes and financial market outcomes this study investigates whether geographic variation in religion induced gambling norms affects aggregate market outcomes we conjecture that gambling propensity would be stronger in regions with higher concentrations of catholics relative to protestants consistent with our conjecture we show that in regions with higher catholic protestant ratios investors exhibit a stronger propensity to hold lottery type stocks broad based employee stock option plans are more popular the initial day return following an initial public offering is higher and the magnitude of the negative lottery stock premium is larger collectively these results indicate that religion induced gambling attitudes impact investors portfolio choices corporate decisions and stock returns

gasoline demand revisited an international meta analysis of elasticities meta analysis is used to determine if there are factors that systematically affect price and income elasticity estimates in studies of gasoline demand four econometric models are estimated using long run and short run price and income elasticity estimates from previous studies as the dependent variables explanatory variables include functional form lag structure time span national setting estimation technique and other features of the model structure elasticity estimates are found to be sensitive to the inclusion or exclusion of some measure of vehicle ownership static models appear to overestimate short run elasticities underestimate long run price elasticities but pick up the full long run income responsiveness there is variation in the elasticity of demand across countries especially in the short run and gasoline demand appears to be getting more price elastic and less income elastic over time

the price and welfare effects of biofuel mandates and subsidies the coordination of agricultural environmental and energy policies requires a thorough understanding of the interactions between crop food and energy markets this paper develops a general equilibrium model to analyze the interactions and to evaluate the price and welfare effect of biofuel mandates and subsidies results suggest that biofuel mandates are a primary cause of some of the major concerns associated with crop based biofuel production including higher food prices and lower consumer welfare the price and welfare effects of biofuel subsidies depend on the level of the biofuel mandate when the mandate is weak or not binding a biofuel subsidy becomes a transfer from consumers to biofuel producers which tends to reduce food and fuel prices because of the negative income effect however with a strong mandate a biofuel subsidy will increase the prices of crops food and fuel when crops account for a large share of production cost and when the supply of crops is inelastic using parameter values consistent with empirical evidence found in the u s we calculated the price and welfare effects of the biofuel mandates and subsidies specified in the energy independence and security act of 2007 results suggest that the biofuel mandates and subsidies increased the price of corn by 25 40 increased the price of food by 1 5 2 5 and lowered the price of gasoline by 5 10 overall the biofuel policies had only a small effect on consumer utility

a comparative study of the work values of north and south vietnamese managers we examine managerial work values and subsequent behaviors of vietnamese managers that foreign investors may face doing business in vietnam to establish a global reference point we compare the managerial values of vietnamese managers with those of chinese and u s managers the findings from this exploratory study while not always intuitive should help foreign investors to better understand vietnam furthermore the study raises important theoretical issues concerning individualism and collectivism as cross cultural measures

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

some inconvenient truths about climate change policy the distributional impacts of transportation policies abstract climate policy has favored costly measures that implicitly or explicitly subsidize lowcarbon fuels we simulate four transportation sector policies cap and trade cat ethanol subsidies a renewable fuel standard rfs and a lowcarbon fuel standard our simulations confirm that alternatives to cat are 2 5 to 4 times more costly but are amenable to adoption due to right skewed distributions of gains we analyze voting on the waxman markey wm cat bill conditional on a district s cat gains a district s rfs gains are negatively correlated with the likelihood of voting for wm our analysis supports campaign contributions as a partial mechanism

cognitive abilities and portfolio choice we study the relation between cognitive abilities and stockholding using the recent survey of health ageing and retirement in europe share which has detailed data on wealth and portfolio composition of individuals aged 50 in 11 european countries and three indicators of cognitive abilities mathematical verbal fluency and recall skills we find that the propensity to invest in stocks is strongly associated with cognitive abilities for both direct stock market participation and indirect participation through mutual funds and retirement accounts since the decision to invest in less information intensive assets such as bonds is less strongly related to cognitive abilities we conclude that the association between cognitive abilities and stockholding is driven by information constraints rather than by features of preferences or psychological traits

carbon abatement in the fuel market with biofuels implications for second best policies a carbon tax on fuel would penalize carbon intensive fuels like gasoline and shift fuel consumption to less carbon intensive alternatives like biofuels since biofuel production competes for land with agricultural production a carbon tax could increase land rents and raise food prices this paper analyzes the welfare effect of a carbon tax on fuel consisting of gasoline and biofuel in the presence of a labor tax with and without a biofuel subsidy the market impacts of a carbon tax are also compared with that of a subsidy findings show that if a carbon tax increases biofuel demand the tax interaction effect due to higher fuel prices is exacerbated by higher land rent and food prices and greater erosion of the carbon tax base thus the second best optimal carbon tax for fuel is lower with biofuel in the fuel mix especially if biofuel is subsidized

the interpretation of instrumental variables estimators in simultaneous equations models with an application to the demand for fish in markets where prices are determined by the intersection of supply and demand curves standard identification results require the presence of instruments that shift one curve but not the other these results are typically presented in the context of linear models with fixed coefficients and additive residuals the first contribution of this paper is an investigation of the consequences of relaxing both the linearity and the additivity assumption for the interpretation of linear instrumental variables estimators without these assumptions the standard linear instrumental variables estimator identifies a weighted average of the derivative of the behavioural relationship of interest a second contribution is the formulation of critical identifying assumptions in terms of demand and supply at different prices and instruments rather than in terms of functional form specific residuals our approach to the simultaneous equations problem and the average derivative interpretation of instrumental variables estimates is illustrated by estimating the demand for fresh whiting at the fulton fish market strong and credible instruments for identification of this demand function are available in the form of weather conditions at sea

weather index insurance for agricultural development introduction and overview this introductory paper highlights the key attributes of weather index insurance and summarizes the major points and conclusions of the three subsequent papers included in the special issue

characteristics of demand for pharmaceutical products an examination of four cephalosporins we model demand for four cephalosporins and compute own and cross price elasticities between branded and generic versions of the four drugs we model demand as a multistage budgeting problem and we argue that such a model is appropriate to the multistage nature of the purchase of pharmaceutical products in particular the prescribing and dispensing stages we find quite high elasticities between generic substitutes and also significant elasticities between some therapeutic substitutes

social interaction and stock market participation we propose that stock market participation is influenced by social interaction in our model any given social investor finds the market more attractive when more of his peers participate we test this theory using data from the health and retirement study and find that social households those who interact with their neighbors or attend church are substantially more likely to invest in the market than non social households controlling for wealth race education and risk tolerance moreover consistent with a peer effects story the impact of sociability is stronger in states where stock market participation rates are higher

supply of cellulosic biofuel feedstocks and regional production pattern interest in cellulosic biofuels has grown due to recent concerns about the impact of expanding production of corn ethanol on food prices and the greater potential of cellulosic biofuels to mitigate climate change the energy independence and security act eisa of 2007 limits the production of corn ethanol to 56 billion liters after 2015 and mandates the production of at least 80 of the 136 billion liters of ethanol from non corn starch based cellulosic feedstocks by 2022 the biomass research and development act of 2000 had established an even more ambitious goal of using biomass to replace the equivalent of 30 of current petroleum consumption by 2030 and estimated that this would require 1 billion dry short tons of biomass annually u s department of energy usdoe 2003 biomass can be obtained from several different sources including forest resources crop residues woody biomass and perennial grasses a usda usdoe report perlack et al 2005 examined the technical feasibility of sustaining this supply of biomass and the land resources that would be required under alternative scenarios with yield enhancing and other technological changes in conventional crops and perennial bioenergy crops the study estimated that 0 54 to 1 billion dry tons of agricultural crop based biomass could be obtained annually from cropland idle cropland and cropland pasture with moderate to high productivity gains in crop productivity residue collection and tillage practices

measuring market power in the ready to eat cereal industry the ready to eat cereal industry is characterized by high concentration high price cost margins large advertising to sales ratios and numerous introductions of new products previous researchers have concluded that the ready to eat cereal industry is a classic example of an industry with nearly collusive pricing behavior and intense nonprice competition this paper empirically examines this conclusion in particular i estimate price cost margins but more importantly i am able empirically to separate these margins into three sources i that which is due to product differentiation ii that which is due to multi product firm pricing and iii that due to potential price collusion the results suggest that given the demand for different brands of cereal the first two effects explain most of the observed price cost margins i conclude that prices in the industry are consistent with noncollusive pricing behavior despite the high price cost margins leading firms are able to maintain a portfolio of differentiated products and influence the perceived product quality it is these two factors that lead to high price cost margins

universal health insurance in the clinton plan coverage as a tax financed public good the financing arrangements embodied in the clinton health reform plan involve some important differences in the way in which public goods are usually financed the subsidies to small low wage firms mandated to provide benefits distort markets in both labor and products and offer incentives for the creation of small firms in addition the financing scheme implicitly envisions a head tax on families at modest income levels but offers a possible rationale for it nevertheless the main reason for many of the financing features appears to be an attempt to hold down the apparent budgetary cost of universal coverage

wealth weather risk and the composition and profitability of agricultural investments despite the growing evidence that farmers in low income environments are risk averse there has been little empirical evidence on the importance of risk in shaping the actual allocation of production resources among farmers differentiated by wealth the authors use panel data on investments in rural india to examine how the composition of productive and nonproductive asset holdings varies across farmers with different levels of total wealth and across farmers facing different degrees of weather risk income variability is a prominent feature of the experience of rural agents in low income countries the authors report evidence based on measures of rainfall variability that the agricultural investment portfolio behavior of farmers in such settings reflects risk aversion due evidently to limitations on consumption soothing mechanisms such as crop insurance or credit markets the authors results suggest that uninsured weather risk is a significant cause of lower efficiency and lower average incomes a one standard deviation decrease in weather risk measured by the standard deviation of the timing of the rainy season would raise average profits by up to 35 percent among farmers in the lowest wealth quartile moreover rainfall variability induces a more unequal distribution of average incomes for a given distribution of wealth wealthier farmers are willing to absorb significant risk without giving up profits to reduce production risk smaller farmers have to invest their limited wealth in ways that reduce their exposure to risk at the cost of lower profit rates the authors found that at high levels of rainfall variability differences in rates of profit per unit of agricultural assets were similar across classes of wealth but over the sample range of rainfall variability these rates of profit were always higher for the poorer farmers than for the wealthier ones suggesting that the disadvantages of small farmers in risk diffusion are more than offset by their labor cost advantage

insurance credit and technology adoption field experimental evidence from malawi this brief summarizes the insurance credit and technology adoption field experimental evidence from malawi the farmers were offered loans for the november 2006 planting season does production risk suppress the demand for credit the author implemented a randomized field experiment to ask whether provision of insurance against a major source of production risk induces farmers to take out loans to adopt a new crop technology the study sample was composed of roughly 800 maize and groundnut farmers in malawi where by far the dominant source of production risk is the level of rainfall the author randomly selected half of the farmers to be offered credit to purchase high yielding hybrid maize and groundnut seeds for planting in the november 2006 crop season the other half of farmers were offered a similar credit package but were also required to purchase at actuarially fair rates a weather insurance policy that partially or fully forgave the loan in the event of poor rainfall surprisingly take up was lower by 13 percentage points among farmers offered insurance with the loan take up was 33 0 percent for farmers who were offered the uninsured loan there is suggestive evidence that reduced take up of the insured loan was due to farmers already having implicit insurance from the limited liability clause in the loan contract insured loan take up was positively correlated with farmer education income and wealth which may proxy for the individual s default costs by contrast take up of the uninsured loan was uncorrelated with these farmer characteristics

biofuel subsidies versus the gas tax the carrot or the stick abstract this paper provides an analytical framework to examine the relative efficiencies of a revenue neutral biofuel subsidy and a gas tax in the presence of pre existing distortions and growing substitutability between fuels both policies are set to achieve a targeted reduction in gasoline use at the state level the model is then calibrated for a small open economy such as illinois which is one of the largest producers of biofuels such as ethanol in the u s the main result of the paper shows that raising the biofuel subsidy use reduces overall welfare by more than a higher gas tax both aimed to achieve a targeted reduction in pure gasoline the relative efficiency of the higher gas tax is primarily due to it exacerbating the pre existing distortion in the biofuel market by less than the subsidy moreover for current parameter estimates welfare improving policy combinations for achieving a targeted amount of energy security are higher gas taxes combined with lower biofuel subsidies and a lower tax on income however the preference for a gasoline labor tax swap shrinks as the elasticity of substitution between the two fuels rises

spatiotemporal analysis of ethanol market penetration abstract consumption of ethanol in the united states has increased rapidly over the last few years fueled by both higher crude oil prices and generous public support measures for renewable fuels the contribution of ethanol to the transport energy mix varies markedly by state heterogeneity in ethanol adoption and market development is investigated using a hierarchical spatiotemporal model a bayesian markov chain monte carlo method is employed for estimation of the proposed flexible model structure besides spatial dependence among neighboring states differential inclusion rates of ethanol are found to be largely determined by national and state level biofuel incentive policies relative gasoline prices feedstock availability household median income mtbe bans and density of fuel retail infrastructure our findings imply that increasing renewable fuel support as well as investing in extending the transportation and fuel retail infrastructure can result in higher ethanol consumption

the impact of natural culture and economic ideology on managerial work values a study of the united states russia japan and china this study assesses the impact of economic ideology and national culture on the individual work values of managers in the united states russia japan and china the convergence divergence crossvergence cdc framework was used as theoretical framework for the study while the schwartz value survey svs was used to operationalize over investigation of managerial work values across these four countries the findings largely support the crossvergence prospective while also confirming the role of national culture implications from the findings are drawn for the convergence divergence crossvergence of values as well as for the feasibility of multidomestic or global strategies for a corporate culture

nonparametric regression techniques in economics this introduction to nonparametric regression emphasizes techniques that might be most accessible and useful to the applied economist the paper begins with a brief overview of the class of models under study and central theoretical issues such as the curse of dimensionality the bias variance trade off and rates of convergence the paper then focuses on kernel and nonparametric least squares estimation of the nonparametric regression model and optimal differencing estimation of the partial linear model constrained estimation and hypothesis testing is also discussed empirical examples include returns to scale in electricity distribution and hedonic pricing of housing attributes

group based funeral insurance in ethiopia and tanzania a funeral is a costly occasion this paper studies indigenous insurance institutions developed to cope with the high costs of funerals based on evidence from rural areas in tanzania and ethiopia these institutions are based on well defined rules and regulations often offering premium based insurance for funeral expenses increasingly they are also offering other forms of insurance and credit to cope with hardship the paper argues that the characteristics and inclusiveness of these institutions make them well placed as models to broaden insurance provision and other developmental activities in these communities the history of these institutions is characterised by a resistance to attempts of political capture and helps to understand their apparent resistance to engage more broadly with ngos and government agencies as a result any attempt to expand their activities will have to be done cautiously

married with children a collective labor supply model with detailed time use and intrahousehold expenditure information we propose a collective labor supply model with household production that generalizes an original model of blundell chiappori and meghir 2005 in our model adults individual preferences not only depend on own leisure and individual private consumption of market goods they also depend on the consumption of domestic goods which are produced by combining goods bought on the market with individuals time we apply our model to new and unique data on dutch couples with children the data contains detailed information about the spouses time use and the intrahousehold allocation of all expenditures our application uses a novel estimation strategy that builds upon the familiar two stage allocation representation of the collective model we obtain interesting and plausible empirical results spouses preferences depend on the consumption of domestically produced goods including children s welfare in addition pareto weights depend on variables like the individual wages and the share in the household s nonlabor income finally and perhaps surprisingly we do not nd evidence that mothers care more for their children than fathers this paper draws on data of the liss panel of centerdata special thanks go to marika de bruijne and arthur van soest who helped to construct the questionnaire and to guillaume schollier

short run long run and cross elasticities of gasoline demand in brazil gasoline is one of the most important of the oil derived products its importance is closely related to its participation in the value of imports of many countries and in a number of cases it is one of the determinants of their balance of payment deficit fiscal deficit and economic growth as opposed to most nations brazil has had a gasoline substitute since 1985 alcohol many studies have tried to estimate the income and price elasticities of the demand for gasoline in several countries this paper extends previous studies by estimating the cross price elasticity between gasoline and alcohol our findings indicate that alcohol is an imperfect substitute for gasoline even in the long run as a consequence the need for a new fuel substitution must be initiated long before petroleum reserves vanish

the economics of brazil s ethanol sugar markets mandates and tax exemptions sugarcane in brazil is processed into sugar and or ethanol often in flex plants that can switch between the two products we develop an economic model of flex plants export demands and two domestic fuel demand curves for a blend of ethanol with gasoline consumed by conventional cars and ethanol consumed only by flex cars we analyze the market impacts of the following policies the blend mandate fixing gasoline prices below world prices the high gasoline tax and a higher tax exemption for ethanol blended with gasoline because brazilian and u s ethanol prices have become linked a change in brazilian ethanol policy or a shock in world sugar markets can now impact u s ethanol and corn prices we show that in theory each policy analyzed has an ambiguous impact on ethanol and sugar prices empirically however a low gasoline tax and a high tax exemption for ethanol used in the fuel blend reduce ethanol and sugar prices this contradicts conventional wisdom overall we find that policy reforms implemented in 2010 offset the ethanol price increase by about 27 due to outward shifts in fuel transportation and sugar export demand curves and due to a reduced sugarcane supply caused by bad weather our model illustrates the importance of brazil s ethanol policies on world commodity markets it also provides insight into how the brazilian government can adjust policies to better control domestic inflation while minimizing impacts on investment

analysing gasoline demand elasticities a survey this paper is a survey of studies on gasoline demand although there are very many dxerent studies in this eld which sometimes appear to arrive at contradictory results we find that with proper stratification of studies by model and data type much of the contict turns to consensus in this survey we classtfy studies by data type and by ten d erent categories of model and with the exception of estimates on seasonal data which tend to be unstable and of certain inappropriate model formulations we find a fair degree of agreement concerning average short run and even long run income and price elasticities

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

pass through of the policy induced e85 subsidy insights from hotelling s model abstract we build a structural model of imperfect competition for a retail market that supplies both low ethanol e10 and high ethanol e85 gasoline blends the model permits us to study some impacts of the e85 subsidy induced by the u s renewable fuel standard specifically how the pass through of this subsidy to retail prices is affected by market power the model is rooted in hotelling s horizontal differentiation framework which is extended to also represent the imperfect substitutability between e10 and e85 a vertical product differentiation attribute the model naturally captures two sources of imperfect competition in the fuel market refueling stations market power arising from their spatial location and limited availability of e85 stations we derive both analytical and numerical solutions for nash equilibrium outcomes under various scenarios in our baseline parameterization when the penetration of e85 stations is incomplete we find that the pass through rate is about 0 7 complete penetration of e85 stations leads to near complete pass through notwithstanding the market power enjoyed by stations because of their spatial location with monopolistic market power e g collusion however with full penetration of e85 stations the pass through rate is lower moreover when market power only arises from location differentiation duopoly model with full penetration of e85 the pass through rate converges to one as the subsidy gets large whereas it converges to zero if a station has exclusivity in selling e85 partial penetration of e85 or there is collusion monopoly power from collusion

sustainable and integrated bioenergy assessment for latin america caribbean and africa sibyl lacaf the path from feasibility to acceptability abstract uncertainties in evaluating bioenergy projects have lead policymakers to adopt a restrictive approach or even refuse to evaluate projects when the available information is limited or a clear perception of its benefits and impact is lacking indeed despite its potential advantages a bioenergy system poses several conceptual and operational challenges for academic as well as practical scrutiny because the inherent relationship and the intersection of areas related to energy production and agricultural activity requires a deeply integrated assessment the aim of this paper is to review the available works in this field and propose an approach for supporting policymakers in the taking decision process of deploying sustainable bioenergy systems the sibyl lacaf framework provides a comprehensive framework for addressing the inherent complexity of the subject and its sustainability and acceptability as part of the evaluation process with this approach different and complementary evaluation methods are reviewed and set in a logical and sequential structure to draw a group of indicators used for assessing a given project with the help of a strengths weaknesses opportunities and threats swot matrix when acceptability is identified as an issue a public consultation and communication pc c scheme can complement this process the suggested application for mozambique indicate that an acceptable outcome is possible even when considering the data requirements and constraints of developing countries thus the potential of this integrated approach outweighs such limitations

individual values and household finances we create individual cultural values measures for households and show that this is an important determinant of their financial behaviour to date personal cultural values have only been indirectly measured through religion and trust but these are at best an approximation of true cultural values applying a holistic framework from the world values survey wvs we create individual measures of cultural values and show that the self expression values of this framework are positively associated with households financial decisions examining the individual cultural values that make up the wvs model we further show that happiness trust and playing an active role in society are individually important determinants of household financial decision making our study shows that cultural values can be brought from a generalized national level to the individual level in order to improve our understanding of household financial decision making

the economic effects of energy price shocks large fluctuations in energy prices have been a distinguishing characteristic of the u s economy since the 1970s turmoil in the middle east rising energy prices in the u s and evidence of global warming recently have reignited interest in the link between energy prices and economic performance this paper addresses a number of the key issues in this debate what are energy price shocks and where do they come from how responsive is energy demand to changes in energy prices how do consumers expenditure patterns evolve in response to energy price shocks how do energy price shocks affect u s real output inflation and stock prices why do energy price increases seem to cause recessions but energy price decreases do not seem to cause expansions why has there been a surge in the price of oil in recent years why has this new energy price shock not caused a recession so far have the effects of energy price shocks waned since the 1980s and if so why as the paper demonstrates it is critical to account for the endogeneity of energy prices and to differentiate between the effects of demand and supply shocks in energy markets when answering these questions

simultaneous equations bias in disaggregated econometric models with the language of econometrics agents may be said to take prices as exogenously given which suggests that prices are econometrically exogenous in individual behavioural equations this involves semantic confusion between different meanings of the word exogenous simultaneity problems cannot generally be dispelled by working with disaggregated data in particular nothing is gained by disaggregating the dependent variable in a regression equation if the micro and macro equations use the same regressors however there may be substantial gains from disaggregation of the regressors in the theory of competitive markets agents act as if they do not affect equilibrium market prices by analogy with the language of econometrics agents may be said to take prices as exogenously given having thus stated the price taking assumption it may seem that prices are econometrically exogenous in behavioural equations for individual agents such as labour demand curves this involves semantic confusion between two different meanings of the word exogenous for example even if each buyer has a negligible influence on the market price there may still be an important correlation between the price and the disturbance in an individual demand equation so that treating price as econometrically exogenous gives biased coefficient estimates the price taking assumption has been used to justify ols estimates of import demand functions for small countries leamer and stern 1970 pointed out that the estimated slope in an import demand function is generally an average of the slopes of the demand and supply functions for imports but

productivity credit risk and the demand for weather index insurance in smallholder agriculture in ethiopia the article explores the relationship between fertilizer use and the demand for weather index insurance wii among smallholder farmers in ethiopia we examine whether fertilizer use is profitable under current smallholder production conditions whether risk related factors affect fertilizer use and we estimate the returns to inputs in the agricultural production function in the absence of insurance we then study how these primitives of agricultural production functions relate to insurance demand the study compares a survey based estimate of willingness to pay with actual uptake for the weather insurance finding the stated and actual demand to be almost completely uncorrelated while those with high marginal returns to inputs say they would purchase insurance only those with low marginal returns actually do consistent with the stated purpose of the product as input insurance insurance demand proves to be highly responsive to the existence and amount of randomly allocated insurance vouchers jel classifications c83 g22 q12

the effects of investing social security funds in the stock market when fixed costs prevent some households from holding stocks with fixed costs of participating in the stock market consumers with high income will participate in the stock market but consumers with lower income will not participate if a fully funded defined contribution social security system tries to exploit the equity premium by selling a dollar of bonds per capita and buying a dollar of equity per capita consumers who save but do not participate in the stock market will increase their consumption thereby reducing saving and capital accumulation calibration of a general equilibrium model indicates that this policy could reduce the aggregate capital stock substantially by about 50 cents per capita

the demand for e85 geographical location and retail capacity constraints abstract consumption of high ethanol gasoline blends must increase if united states renewable biofuel mandates are to rise above current levels as envisioned by the renewable fuel standard one such blend is e85 which contains no more than 85 ethanol and no less than 15 gasoline we derive the demand for e85 based on a model of motorists preferences for motor fuel blends and calibrate the demand for e85 using data on the location of flex vehicles and fuel stations that sell e85 in the united states we also show how limits on the capacity of fuel stations to sell e85 affect demand and explore the potential future demand for e85 by increasing the number of fuel stations offering e85 and the number of flex vehicles we show that the existing fleet of flex vehicles is sufficient to accommodate more than 15 billion gallons of ethanol without a large price discount on e85 only if the number of stations that sell e85 increases substantially provided with fast enough installation of new e85 pumps this level of consumption would be sufficient to meet the mandates envisioned for conventional ethanol by 2015

automobile externalities and policies this paper discusses the nature and magnitude of externalities associated with automobile use including local and global pollution oil dependence traffic congestion and traffic accidents it then discusses current federal policies affecting these externalities including fuel taxes fuel economy and emissions standards and alternative fuel policies summarizing insofar as possible the welfare effects of those policies finally we discuss emerging pricing policies including congestion tolls and insurance reform and summarize the appropriate combination of policies to address automobile externalities

demand for a labor based drought insurance scheme in ethiopia a stated choice experiment approach index based weather insurance is increasingly used to manage weather related risks in smallholder agriculture however cash constrained smallholders often lack the resources to pay an insurance premium which may undermine its wider adoption this article investigates alternative insurance payment methods that may help to enhance the adoption of index based weather insurance we use a choice experiment to elicit smallholders willingness to pay in cash or labor for index based weather insurance in four districts in the south central highlands of ethiopia the insurance schemes were created using a fractional factorial design with three factors work cash and payout rate we analyze the choice data using a random parameter mixed logit model we find that the average participants need a subsidy to pay cash for insurance because their willingness to pay is less than the expected cost of the insurance on average they are willing to pay only 0 81 etb ethiopian currency to get an expected yearly payout of 1 etb however most are willing to participate in work for insurance programs at lower daily wage rates than is common for other work programs in ethiopia

egalitarianism and international investment abstract this study identifies how country differences on a key cultural dimension egalitarianism influence international investment flows a society s cultural orientation toward egalitarianism is manifested by intolerance for abuses of market and political power and a desire for protecting less powerful actors we show egalitarianism to be based on exogenous factors including social fractionalization dominant religion circa 1900 and war experience from the 19th century we find a robust influence of egalitarianism distance on cross national flows of bond and equity issuances syndicated loans and mergers and acquisitions an informal cultural institution largely determined a century or more ago egalitarianism exercises its effect on international investment via an associated set of consistent contemporary policy choices but even after controlling for these associated policy choices egalitarianism continues to exercise a direct effect on cross border investment flows likely through its direct influence on managers daily business conduct

the market impact and the cost of environmental policy evidence from the swedish green car rebate we quantify the effects of the swedish gcr a program to reduce oil dependence and greenhouse gas emissions in the automobile industry we find the gcr to increase the market shares of green cars and its cost to be 109 tonco2 saved thus 5 times the price of an emission permit since the main green cars in sweden are ffvs flexible fuel vehicles which can switch between petrol gasoline and ethanol we also account for fuel choice which increases the cost of the program finally we show that consumers would have purchased ffvs regardless of the rebate provided by the gcr

nonparametric estimation of exact consumers surplus and deadweight loss we apply nonparametric regression models to estimation of demand curves of the type most often used in applied research from the demand curve estimators we derive estimates of exact consumers surplus and deadweight loss which are the most widely used welfare and economic efficiency measures in areas of economics such as public finance we also develop tests of the symmetry and downward sloping properties of compensated demand we work out asymptotic normal sampling theory for kernel and series nonparametric estimators as well as for the parametric case the paper includes an application to gasoline demand empirical questions of interest here are the shape of the demand curve and the average magnitude of welfare loss from a tax on gasoline in this application we compare parametric and nonparametric estimates of the demand curve calculate exact and approximate measures of consumers surplus and deadweight loss and give standard error estimates we also analyze the sensitivity of the welfare measures to components of nonparametric regression estimators such as the number of terms in a series approximation

consumer theory and the demand for money the following sections are included introductionthe definition of moneythe microeconomic theory of a monetary economythe aggregation theoretic approach to money demandindex number theorythe links between aggregation theory index number theory and monetary theoryunderstanding the new divisia aggregatesthe optimal level of monetary subaggregationeconometric considerationsapproximating the monetary services subutility functionan exampleempirical dimensionsempirical comparisons of index numbersempirical results for the demand system approachextensionsconclusions this abstract was borrowed from another version of this item

policy shocks and market based regulations evidence from the renewable fuel standard the renewable fuel standard mandates large increases in u s biofuel consumption and is implemented using tradable compliance credits known as rins in early 2013 rin prices soared causing the regulator to propose reducing future mandates we estimate empirically the effect of three policy shocks that reduced the expected mandates in 2013 we find that the largest of these shocks decreased the value of the fuel industry s 2013 compliance obligation by 7 billion we then study the effects of the shocks on commodity markets and the market value of publicly traded biofuel firms results show that the burden of the mandate reductions fell primarily on advanced biofuel firms and commodity markets of the marginal compliance biofuel we argue that the policy shocks reduced the incentive to invest in the technologies required to meet the future objectives of the rfs and discuss alternative policy designs to address the problems that arose in 2013

agricultural research spending must increase in light of future uncertainties abstract agricultural productivity depends critically on investments in research and development r d but there is a long lag in this response failing to invest today in improvements of agricultural productivity cannot be simply corrected a few decades later if the world finds itself short of food at that point in time this fundamental irreversibility is particularly problematic in light of uncertain future population income and climate change as portrayed in the ipcc s shared socio economic pathways ssps this paper finds the optimal path of agricultural r d spending over the 21st century for each ssp along with valuation of those regrets associated with investment decisions later revealed to be in error the maximum regret is minimized to find a robust optimal r d pathway that factors in key uncertainties and the lag in productivity response to r d results indicate that the whole of uncertainty s impact on r d is greater than the sum of its individual parts uncertainty in future population has the dominant impact on the optimal r d expenditure path the robust solution suggests that the optimal r d spending strategy is very close to the one that will increase agricultural productivity fast enough to feed the world under the most populous scenario it also suggests that society should accelerate r d spending up to mid century thereafter moderating this growth rate

consumption risk technology adoption and poverty traps evidence from ethiopia much has been written on the determinants of input and technology adoption in agriculture with issues such as input availability knowledge and education risk preferences profitability and credit constraints receiving much attention this paper focuses on a factor that has been less well documented the differential ability of households to take on risky production technologies for fear of the welfare consequences if shocks result in poor harvests building on an explicit model this is explored in panel data for ethiopia historical rainfall distributions are used to identify the counterfactual consumption risk controlling for unobserved household and time varying village characteristics it emerges that not just ex ante credit constraints but also the possibly low consumption outcomes when harvests fail discourage the application of fertilizer the lack of insurance causes inefficiency in production choices