regulation and efficiency in transition the case of telecommunications in italy abstract in regulating the telecommunications industry the separation between network and retail functions which is designed to countervail the market power of incumbent operators is a relevant issue despite its importance little empirical research has addressed the effects of such a separation accordingly this paper provides insights into the consequences of the italian communications regulatory authority s agcom decision to impose this type of separation on the incumbent telecommunications operator telecom italia in particular the studied separation is between the firm s network related functions and those used for provision of its communication services the present research finds that the type of separation implemented by agcom allows a provider to maintain the advantages of operational scale in its network structure without dampening competition in the existing market for communications services the study also offers further empirical evidence on the advantages of a composite vs translog function in analyzing the multiproduct cost structure of a telecommunications operator

human capital formation and local economic performance bradley s and taylor j 1996 human capital formation and local economic performance reg studies 30 1 14 this paper is concerned with the interaction between the vocational education and training system vet and local economic performance in britain after briefly discussing the shortcomings of britain s vet system the paper examines the way in which the education and training system and the local economy interact in particular it is argued that the outputs from the local education and training system determine and are determined by the locality s stock of high skill workers these high skill workers in turn help to determine the competitiveness and hence the economic performance of the local economy this has feedback effects on the stock of high skill workers through its effect on the occupational mix of in migrants some empirical tests of the model are provided based on data relating to 107 local education authority areas in england bradley s et taylor j 1996 la formation du capi

a test for subadditivity of the cost function with an application to the bell system stable url http links jstor org sici sici 0002 8282 28198409 2974 3a4 3c615 3aatfsot 3e2 0 co 3b2 rthe american economic review is currently published by american economic association your use of the jstor archive indicates your acceptance of jstor s terms and conditions of use available athttp www jstor org about terms html jstor s terms and conditions of use provides in part that unless you have obtainedprior permission you may not download an entire issue of a journal or multiple copies of articles and you may use content inthe jstor archive only for your personal non commercial use please contact the publisher regarding any further use of this work publisher contact information may be obtained athttp www jstor org journals aea html each copy of any part of a jstor transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission the jstor archive is a trusted digital repository providing for long term preservation and access to leading academicjournals and scholarly literature from around the world the archive is supported by libraries scholarly societies publishers and foundations it is an initiative of jstor a not for profit organization with a mission to help the scholarly community takeadvantage of advances in technology for more information regarding jstor please contact support jstor org http www jstor orgmon jul 2 16 52 19 2007

the local income and employment impact of lancaster university the paper presents the results of an analysis using keynesian local open economy multipliers of the impact of lancaster university upon income and employment in the local city and surrounding hin

estimating demand for local telephone service with asymmetric information and optional calling plans in this paper i study the theoretical and econometric implications of agents uncertainty concerning their future consumption when a monopolist offers them either a unique mandatory nonlinear tariff or a choice in advance from a menu of optional two part tariffs agents uncertainty is resolved through individual and privately known shocks to their types in such a situation the principal may screen agents according to their ex ante or ex post type by offering either a menu of optional tariffs or a standard nonlinear schedule the theoretical implications of the model are used to evaluate a tariff experiment run by south central bell in two cities in kentucky in 1986 the empirical approach explicitly accounts for the existence of informational asymmetries between local telephone users and the monopolist leading to different nested econometric specifications under symmetric and asymmetric information the empirical evidence suggests that there exists a significant asymmetry of information between consumers and the monopolist under both tariff regimes all expected welfare components failed to increase with the introduction of optional tariffs for the estimated value of the parameters copyright 2002 wiley blackwell

competition and productivity growth the case of the u s telephone industry i introduction there are few empirical studies on the relative performance of firms in competitive and monopolistic markets this contrasts with the large body of literature that compares the performance of privately owned and governmental firms one reason for the scarcity of studies of the former type is that competitive and monopolistic firms rarely coexist in the same industry and country 1 this makes it difficult to distinguish between industry and market structure effects on the other hand relying on intercountry comparisons as for example caves christensen and swanson 1981 do for u s and canadian railroads renders the analysis potentially sensitive to country effects the telephone industry in the united states offers one of the best opportunities for empirical analysis of the consequences of competition and monopoly some new entry in the long distance telephone market was allowed by the early 1960s while entry and competition in the local telephone market had yet to materialize by the beginning of the 1990s hence it is appropriate to focus on differences in performance between at t long lines and the regional monopolies 2 since there may be differences in initial conditions between the local service and long distance markets comparisons of performance should control for such differences both markets however clearly employ very similar technology this holding other relevant conditions constant should lead to similar changes in productivity to sharpen the analysis we focus on differences in the annual rate of productivity growth and not the level while local exchange carriers lecs still largely maintain their monopolistic position rapid technological advance in telecommunications is changing the established market structure in the local telephone industry the recent u s telecommunications act of 1996 was aimed at eliminating legal barriers that have suppressed technically feasible local competition certainly some competition in local telephone markets is under way is such competition socially justified and an appropriate objective of public policy the effect of competition on productivity growth holds at least part of the answer we need to know whether competitive markets are likely to raise efficiency in assessing how much effort should go into reducing entry barriers and increasing competition in the local telephone markets still another policy issue on which our study has a bearing is the relation of firm scale to costs for example in the context of recent mergers of regional telecommunication companies are reductions in costs and increases in productivity a plausible expectation competitive effects in the telephone industry have been examined mainly through aggregate time series data thus oum 1990 using chessler s competition index for long distance service concludes there have been positive effects of competition on productivity whereas crandall 1991 using a time dummy finds the results inconclusive 3 at the firm level denny fuss and waverman 1981 and kiss 1983 decompose total factor productivity tfp growth for bell canada through estimated cost functions nadiri and prucha 1989 measure productivity growth for the u s bell system with several alternative cost models but none of these careful firm level studies focuses on competitive effects ying and shin 1993 on the other hand do examine the spillover effect of the at t divestiture on cost saving by the regional companies their interesting study which shows positive spillover effects does not however permit strong conclusions because of the shortness of the period examined 1976 87 ii the state of competition in the u s telephone industry before the divestiture of at t the u s telephone industry consisted of several vertically integrated common carriers at t accounted for about 80 of industry revenues through a group of 22 operating companies plus the at t long lines

the barnett allocation mechanism formula plus influence christie a and swales j k the barnett allocation mechanism formula plus influence regional studies this paper seeks to explain why the operation of the barnett formula has failed to generate convergence in the per capita public expenditure levels in the four countries of the united kingdom using scotland as an example this paper argues that a formula plus influence allocation mechanism has been in place this offers improved flexibility greater political integration and increased information flows than would be available through either a straight bargaining or a formula process while devolution has not changed the barnett formula it has altered the environment in which it operates and that this may well destabilize an otherwise secure system christie a et swales j k la methode d affectation barnett formule plus influence regional studies cet article cherche a expliquer pourquoi l application de la formule barnett n a pas reussi la convergence des depenses publiques par tete dans les

access costs and entry in the local telecommunications network a case for de averaged rates abstract the telecommunications bill passed by congress in february 1996 means that the present method of covering the cost of customer access to the local telecommunications network through non cost based access charges cannot be sustained over the long run however there is a belief that cost based rates at the local level would be prohibitively high and would threaten universal service objectives major tasks facing the federal communications commission and state regulators will be determining what the terms and charges for interconnection should be and who will bear the costs associated with universal service this work estimates a generalized translog cost function of access costs at the local level in order to address these issues the results of this study are that there are economies of scale in the provision of access to the local network and that these costs differ by geographical location one of the important findings of this study is that contrary to popular belief cost based rates at the local level would not be prohibitively high and would not threaten universal service objectives however given the existence of economies of scale pro competitive regulatory controls will be required that will restrain dominant carriers from abusing their market power and network owners from squeezing out new entrants

modelling cost structure the bell system revisited this paper analyses a recent public policy decision and the crucial role played by the choice of the functional form the break up of the bell system is indeed a classic case of anti trust settlement and constitutes one of the most prominent and controversial applications of microeconomics to public policy it is argued that demanding multi output cost properties such as economies of scope for this is the considerable robustness problem displayed by the tranlog cost functional form the reason for this is the considerable able to robustness problem displayed by the translog cost function which is the source underlying many of the expert disagreements it is suggested that the non robustness is due to what ils termed the flip flop property and it is shown that the available empirical evidence from the pre divestiture bell system supports this argument to obtain robust results we propose that the analysis is constrained to the proper region of the cost function we propose that the analysis is con

what does a university add to its local economy the local multiplier effects of a university are estimated using data for the university of nottingham gross output and disposable income multipliers are calculated the latter are adjusted to exclude the incomes of induced migrants whose welfare is assumed unchanged

price regulation of access to telecommunications networks abstract without access of networks to each other competition in the telecommunications sector would hardly have spread so quickly such mutual access is necessary for carriers to provide ubiquitous service and enable endusers to call and be called by anybody without subscribing to a system wide monopolist one way access concerns bottleneck inputs provided by an incumbent network to entrants while two way access concerns the interconnection between networks whereas one way access regulation is exclusively driven by containment of market power two way access is additionally affected by collusion possibilities among the numerous pricing rules discussed none clearly dominates this article provides a roadmap vis a vis the competing policy objectives for access price regulation

the impact of the university of portsmouth on the local economy this study measures the local impact using various detailed databases which allow more accurate measurement of for example the amount the university spends in the local economy rather than elsewhere in order to assess the total i e direct indirect and induced effects of direct university spending an input output table was constructed this table is not based on the more usual non survey approach but on direct information on sales imports and exports which were collected through survey work thus it is argued that the present estimates provide more accuracy than has generally been possible in other studies using these various databases it was estimated that in 1994 95 total expenditure by the university sector in the local economy amounted to 38 5m this direct expenditure was estimated to result in an output multiplier effect of between 1 24 and 1 73 although it is argued that the higher type 2 multipliers are more likely to reflect the full impact of the university in terms of employmen

the appropriateness of the poolability assumption for multiproduct technologies evidence from the english water and sewerage utilities abstract the empirical literature on the cost structure of multiproduct firms e g public utilities providing in combination gas water and electricity traditionally assumes a common technology across different products and stages of production letting the issue of poolability unexplored the appropriateness of this assumption is tested here by estimating a general cost function for samples of uk specialized and sewerage diversified water utilities the results show the existence of both aggregate scale economies and diseconomies of scope more interestingly the hypothesis that the two groups of water companies share the same technological parameters is rejected given the implications of this finding in terms of optimal industry configuration and possible restructuring policies e g mergers and or divestitures our test suggests caution in pooling samples when undertaking empirical studies on data which refer to multiproduct technologies

competition and allocative efficiency the case of the u s telephone industry this study investigates the effect of competition on the productive efficiency of the u s telephone industry taking into account the fact that the industry was subject to rate of return regulation it is shown that competition induces the incumbents to use capital inputs closer to the unconstrained optima thereby reducing the allocative inefficiency caused by the averch johnson effect this effect is in addition to the usual technical efficiency improvement induced by competition empirical results based on annual data for the u s telephone industry for the 1951 90 period suggested that competition improved the allocative efficiency of the incumbent firms which had been under a rate of return regulation until 1989 copyright 1995 by mit press

costly gains to breaking up lecs and the baby bells while the divestiture of at t was intended to produce benefits in the long distance market the evidence suggests it has created an unexpected side benefit in local telephone markets the authors results show that local exchange carriers have realized immediate cost savings in responding to competitive pressures since the breakup with the baby bells experiencing generally larger gains dynamically these productivity gains have increased over time at a relatively constant rate although gains of 3 5 percent of total cost are not that large the absolutely large costs of telephone companies imply significant cost savings of nearly 72 million for the representative firm copyright 1993 by mit press

nonparametric analysis of cost complementarities in the telecommunications industry the market structure of the telephone industry has been the focus of a large body of empirical research following the divestiture of at t in 1984 using data on local exchange carriers lecs i estimate the total cost function of lecs operating between 1988 and 1995 first i show that cost complementarities can be nonparametrically identi ed in many situations where economies of scope and subadditivity which were the focus of previous empirical research cannot be identi ed next i propose a feasible estimation model taking into account all the properties that a cost function needs to satisfy according to economic theory the telephone companies are treated as multi product rms producing two outputs local and toll calls the results support the assumption that cost complementarities exist in the production of these two outputs the amounts of complementarities are computed and shown to be bigger for small companies

testing for subadditivity of vertically integrated electric utilities the public policy debate over electric utility deregulation has a long history and generated a considerable amount of research much of this research focused on estimating the degree of scale economies in generation with little attention given to the effect vertical integration may have on cost structure the vertical integration issue is important because most observers consider the transmission and distribution stages to be natural monopolies according to joskow and schmalensee economics of integration if any would link the production stages together possibly extending natural monopoly conditions from transmission distribution to generation even if the latter exhibited no economies of scale 27 refs 5 tabs

the public accounting industry production function abstract a translog function is specified to represent the relation between revenue and human resource inputs in public accounting firms estimation of the model using a balanced panel of annual data for 64 large cpa firms for the period 1995 1999 indicates that increasing returns to scale prevail in the public accounting industry justifying recent merger and acquisition activities among accounting firms average marginal revenue product of partners increased monotonically from 1995 to 1998 decreased slightly in 1999 and was about nine times that of other professionals during 1995 1999 the public accounting industry exhibited continuing improvement in productivity over the 5 years

effect of network unbundling on retail prices evidence from the telecommunications act of 1996 abstractthis paper empirically examines the effects of network unbundling on retail prices in u s local telephone markets panel data for 7 604 wire centers in 43 states from 1996 to 2002 are used to estimate the price effects from the unbundling and entry promoting conditions of the telecommunications act results show that section 271 led to the rebalancing of prices between customer groups in which residential prices increased and the prices paid by small businesses decreased there is some rebalancing of prices between urban and rural regions with business prices decreasing by a larger amount in urban regions our results from all markets indicate that regulators responded rationally to competition by rebalancing prices to reduce cross subsidies

human capital graduate migration and innovation in british regions with the aid of a geographical information system our paper constructs a three stage least squares simultaneous equation model to investigate the interrelationships between the interregional flows of human capital and the innovation dynamism of a region in order to do this we model the interregional migration behaviour of high quality british university graduates from university into first employment and we relate these human capital flows to both the labour market characteristics and the knowledge characteristics of the employment regions this is done for all industries and separately for just high technology industries our results indicate that for england and wales there is a two way causality between the interregional human capital employment migration flows of recent university graduates and the innovation performance of regions however the results for great britain as a whole depend on whether london is included and scotland is excluded we find little or no support for the argument that the presence of local universities or small firms promotes regional innovation

unnatural monopolies in local telephone we attempt to overcome the serious data problems of past telecommunications cost studies by focusing on local exchange carriers lecs with enough degrees offreedom to yield precise estimates our global subadditivity tests show that the cost function is definitely not subadditive the results suggest that the benefits to breaking up the monopoly outputs of existing lecs substantially outweigh the potential losses in efficiency they also support permitting entry and increasing competition in local exchange markets furthermore given the competitive nature of long distance service it is doubtful that the predivestiture bell system was a natural monopoly

rejoinder natural monopoly and the bell system response to charnes cooper and sueyoshi our study of the bell system cost function shows that it is possible to reject the hypothesis that at t was a natural monopoly our study is based on a regression analysis of a translog cost function estimated on 1947 1977 data charnes cooper and sueyoshi charnes a w w cooper t sueyoshi 1988 a goal programming constrained regression review of the bell system breakup management sci 34 1 26 claim that they reverse our conclusion when they use goal programming estimators of a translog cost function estimated on exactly the same data that we use this claim is false there is no basis for comparing our estimates with their estimates because they in fact use different data than we use and estimate a different cost function than we estimate moreover when goal programming estimates and regression estimates based on the same data and similar cost function specifications are compared they yield similar estimates and produce the same inference about natural monopoly

the returns to education microeconomics in this paper we focus on education as a private decision to invest in human capital and the estimation of the rate of return to that private investment while the literature is replete with studies that estimate the rate of return using regression methods where the estimated return is obtained as the coefficient on a years of education variable in a log wage equation that contains controls for work experience and other individual characteristics the issue is surrounded with difficulties we outline the theoretical arguments underpinning the empirical developments and show that the evidence on private returns to the individual is compelling despite some of these issues surrounding the estimation of the return to schooling our evidence based on estimates from a variety of datasets and specifications is that there is an unambiguously positive effect on the earnings of an individual from participation in education moreover the size of the effect seems large relative to the returns on other investments

a natural monopoly in natural gas transmission abstract in this article we test for subadditivity in the cost structure associated with transporting natural gas by trans canada pipelines ltd and measure for possible cost savings from increased competition that could be realized by removing the monopoly status granted by the national energy board in measuring subadditivity we apply both the baumol et al contestable markets and the theory of industry structure 1982 and the evans and heckman am econ rev 764 1984 613 procedures our results show evidence of subadditivity in the cost structure and consequently the possible benefits from increased competition resulting from splitting up the monopoly could be offset by the sacrifice of scale efficiencies

a typology and assessment of multi sector regional economic impact models loveridge s 2004 a typology and assessment of multi sector regional economic impact models reg studies38 305 317 this paper provides a summary and critical review of the types of multi sector models with inter sectoral linkages commonly used to predict the total impact of an event plant opening closing or policy change on the regional economy the following model types are included economic base input output social accounting matrix integrated econometric input output and computable general equilibrium models appropriate uses of the various modelling approaches are presented along with some general operating principles and ethical considerations the paper concludes with directions for future research loveridge s 2004 une typologie et un bilan des modeles des impacts economiques regionaux multi sectoriels reg studies38 305 317 cet article cherche a faire le resume et la critique des typologies de modeles multi sectoriels qui ont des liens intersectoriels et dont on se sert frequemm

energy consumption in china past trends and future directions abstract in 2003 china s energy consumption amounted to 1678 million tonnes coal equivalent mtce making china the world s second largest consumer behind only the united states china is now also one of the largest oil importers in the world with an economy that is expected to maintain a rate of growth of 7 8 for decades china s role in the world energy market becomes increasingly influential this makes it important to predict china s future demand for energy the objective of this paper is to apply the bayesian vector autoregressive methodology to forecast china s energy consumption and to discuss potential implications the results of this paper suggest that total energy consumption should increase to 2173 mtce in 2010 an annual growth rate of 3 8 which is slightly slower than the average rate in the past decade the slower growth reflects expected slower economic growth and a decline in energy consumption due to structural changes in the chinese economy

the tax returns of public spending on universities an estimate with monte carlo simulations pastor j m and peraita c the tax returns of public spending on universities an estimate with monte carlo simulations regional studies this paper proposes a methodology based on counterfactual scenarios and the existence of uncertainty to estimate the tax returns of public spending of regional governments on their public universities the introduction of differences in the time spent by the students at university and the proportion of the total public expenditure implies making assumptions about uncertainty the paper applies monte carlo simulations incorporating stochastic elements to estimate the tax returns of public spending in the university of the basque country spain the results indicate that public expenditure in university education is a profitable investment from a fiscal perspective

energy efficiency as an instrument of regional development policy the impact of regional fiscal autonomy this paper analyses the system wide impact of increased household energy efficiency in a regional context using scotland as an example it shows that household energy efficiency improvements typic

telecommunications deregulation and subadditive costs are local telephone monopolies unnatural abstract in early 1996 congress passed the telecommunications law providing the foundation for the opening of regulated local telephone monopolies to competition one important premise for introducing competition into local telephone markets is that these markets are not or are no longer natural monopolies this paper reexamines the natural monopoly issue using a cost function that controls for firm heterogeneity our subadditivity tests suggest that local exchange carriers lecs costs are subadditive when there are controls for unobserved heterogeneity suggesting that local telephone markets are natural monopoly markets

a goal programming constrained regression review of the bell system breakup the recently implemented court decision to break up bell american telephone telegraph co to accord with u s anti trust laws represents a highly significant policy decision which is proving to be influential in other countries as well as the u s the telecommunication industry is of such size and importance that even relatively small economies that might be lost with bell s breakup as a natural monopoly could involve substantial welfare losses to consumers and producers studies commissioned by the u s justice department that approached this topic by econometric methods reported that the evidence failed to support the contention that bell was a natural monopoly here a goal programming constrained regression as developed in the management science literature uses the same functional form and the same data but nevertheless reverses the main findings of the econometric studies in every one of the 20 years covered this kind of difference in results obtained by two different methods of analysis poi

regulatory restructuring and incumbent price dynamics the case of u s local telephone markets prior to the telecommunications act of 1996 many u s states restructured their regulatory framework by replacing rate of return regulation with competition in both the local exchange service and local long distance markets and adopting price regulation price caps and price freezes using a panel data set of incumbent firm prices for three services i investigate whether price regulation and differences in entry conditions affect incumbent operators rate structures i find that competition has prompted a significant amount of rate rebalancing by reducing the amount of cross subsidization present in local telephone markets in addition the added flexibility of price cap regulation speeds the rate rebalance effects of competition

labour and capital saving technical change in telecommunications the australian telecommunications sector is being improved and extended through substantial recent investment in intelligent technology such as digital switching fibre optics satellite and cellular transmission and the internet these technologies are being progressively integrated with technology from the broadcasting computer and electronics industries providing a unified information infrastructure for information transmission and processing technological progress embodied in new equipment has the effect of increasing the efficiency of the factors of production such efficiency increases can be biased towards a particular factor for instance the impact of labour augmenting technical change is a decline in the cost of labour per unit of production when such biases are apparent the relativity between the costs of labour and capital per unit of production is changed in the longer term technical change can impact on the rate of employment growth and also on the rate of capital accumulation in th

economies of scale and natural monopoly in the u s local telephone industry this paper shows that firm specific economies of scale or net overall economies are correlated with subadditivity both economies of scale and subadditivity are a decreasing function of firm size most firms are observed to be in the relatively flat portion of the long run average cost curve with pronounced economies of scale observable only at the low end of the scale economies of scope as reflected in cost complementarities do not appear to be a source of subadditivity the results are estimated using translog total cost functions and the fact that these cost functions include arguments for the quality of capital and of labor represents an innovation in methodology

the bell system divestiture deregulation and the efficiency of the operating companies abstract a variety of casual evidence has been offered in measurement of the efficiencies and inefficiencies thought to flow from the bell system divestiture and accompanying state regulatory reforms to address several questions in this regard we estimate a regulated cost function for local exchange services using panel data on the divested bell operating companies bocs divestiture and regulatory reform are found to have produced significant efficiencies as of 1993 saving about 20 percent in cost relative to what would have obtained in the absence of these events more specifically to 1993 the divestiture yielded savings of 115 4 billion and state level regulatory reform yielded a slightly smaller 96 7 billion in savings both measured in 1993 dollars output augmentation factor bias and allowed rate of return effects contribute in identified ways to these overall results

policy scepticism and the impact of scottish higher education institutions heis on their host region accounting for regional budget constraints under devolution hermannsson k lisenkova k mcgregor p g and swales j k policy scepticism and the impact of scottish higher education institutions heis on their host region accounting for regional budget constraints under devolution regional studies a policy scepticism has emerged that challenges the results of conventional regional higher education institution hei impact analyses this paper provides a systematic critique of such scepticism while rejecting its extreme form the limiting effect of the binding public sector expenditure constraints under devolution is noted and it is shown how conventional impact analyses can be augmented to accommodate these constraints while the results suggest that conventional impact studies overestimate the expenditure impacts of heis they also demonstrate that the policy scepticism that treats these expenditure effects as irrelevant neglects some key aspects of heis in particular their export intensity

economics of devolution decentralization in the uk some questions and answers mcgregor p g and swales k 2005 economics of devolution decentralization in the uk some questions and answers regional studies 39 477 494 the paper explores the economic implications of the radical process of devolution decentralization and delegation of decision making and policy delivery initiated by the post 1997 uk labour government it is argued that the economies of all the presently devolved regions ultimately suffer if the barnett formula is rigorously imposed it is shown that the efficiency of devolving fiscal authority involves a balance of positive and negative elements depending on wage bargaining and migration responses it is then argued that delegation devolution of regional economic development policies while exploiting regional information advantages neglects regional economic interdependence so there are potential gains from greater cooperation coordination