serial nonparticipation in repeated discrete choice models we consider alternative econometric strategies for addressing serial nonparticipation that is repeated choice of the same alternative or same type of alternative across a series of choice occasions in data typically analyzed within the repeated discrete choice framework single and double hurdle variants of the repeated discrete choice model are developed and applied to choice experiment and multisite seasonal recreation demand data our results suggest that hurdle models can generate significant improvements in statistical fit and qualitatively different policy implications particularly in choice experiment applications where the proper treatment of serial nonparticipation is relatively more ambiguous

do solicitations matter in bank credit ratings results from a study of 72 countries would the credit ratings of unsolicited banks be higher if they were solicited alternatively would the credit ratings of solicited banks would be lower if they were unsolicited to answer these questions we use an endogenous regime switching model and data from 460 commercial banks in 72 countries excluding the united states for the period 1998 2003 the answer to both questions is yes our results show that the observed differences between solicited and unsolicited ratings can be explained by both the solicitation status and financial profile of the banks this finding is a new contribution to the literature

evaluating the relative strength of product specific factors in fuel switching and stove choice decisions in ethiopia a discrete choice model of household preferences for clean cooking alternatives switching from conventional stoves to modern clean safe and efficient stoves will improve health and social welfare for the 2 7 billion people worldwide that lack reliable access to modern energy services in this paper we critically review some key theoretical dimensions of household consumer behaviour in switching from traditional biomass cooking stoves to modern efficient stoves and fuels we then describe the results of empirical research investigating the determinants of stove choice focusing on the relative strength of product specific factors across three wealth groups a stated preference survey and discrete choice model were developed to understand household decision making associated with cooking stove choice in addis ababa ethiopia the study found that with the exception of price and usage cost factors for the high wealth group the product specific factors that were investigated significantly affect stove and fuel choices the relative strength of factors was assessed in terms of marginal willingness to pay and provides some evidence that consumer preference for higher quality fuels and stoves tends to increase with increasing wealth

the impact of consolidation and safety net support on canadian us and uk banks 1893 1992 abstract this study investigates bank consolidation and safety net support provision in canada the uk and the us over a 100 year historical period and the impact of these policy variables on bank capital and risk taking choices the study finds that consolidation and strengthened safety nets have largely supplanted the historical role of high bank capital levels in providing protection to risk adverse depositors furthermore despite strengthened safety net guarantees the study finds that bank asset risk choices in the 1980s are comparable to those observed in the 1890s while bank equity volatilities have shown approximately a 10 fold increase over this period finally the study finds that bank capital ratios are as asset risk sensitive in the 1980s as those in the 1890s perhaps reflecting residual market discipline or regulatory moral suasion effects

competition and increasing returns to scale a model of bank size this study examines the causal effects of bank size on banks survival asset quality and leverage two forces drive these effects increasing returns to scale derived from banks expertise and competition the first enables bigger banks to survive competition better have higher asset quality and be more leveraged it drives banks into a race for expansion this race toughens competition between banks which edges out small banks and may worsen all banks asset quality consequently the banking industry will be dominated by a small number of highly leveraged banks in this study financial intermediation arises endogenously and co exists with direct finance

increasing returns to scale in financial intermediation and the non neutrality of government policy a general equilibrium model of imperfectly competitive financial intermediaries is constructed and used to study the effects of some standard policy experiments one time increases in the growth rate and in the level of the stock of money have non neutral and sometimes surprising effects on interest rates the quantity of intermediated borrowing and lending the number of intermediary firms inflation and the price level optimal government macroeconomic policy is shown to reflect a tradeoff between public sector frictions and the capital market distortion created by increasing returns to scale and imperfect competition in private intermediation

optimization of pumped storage capacity in an isolated power system with large renewable penetration this work describes an economic analysis of the inclusion of pumped storage in a small island system that has abundant renewable energy available but that at times cannot accept all of this power because of limits imposed by security criteria the question of whether or how much pumped storage to include is addressed by formulating a linear programming optimization problem the stochastic nature of load and renewable production is addressed using scenarios developed through fuzzy clustering both the unit capacity in mw and the reservoir storage capacity in mwh are optimized and optimal operating strategies for the scenarios are produced results showed that including pumped storage can be an effective means of allowing larger penetration of intermittent renewable energy sources improving both the dynamic security and the economic operation of a test system including the dynamic security criteria in the economic question of dimensioning the pumped storage unit proved to make a significant difference in the optimal pumped storage capacity

bank competition and credit standards this article offers an explanation for the substantial variation of credit standards and price competition among banks over the business cycle as the economic outlook improves the average default probabilities of borrowers decline this affects the profitability of screening and causes bank screening intensity to display an inverse u shape as a function of economic prospects low screening activity in expansions creates intense price competition among lenders and loans are extended to lower quality borrowers as the economic outlook worsens price competition diminishes and credit standards tighten significantly deposit insurance may contribute to the countercyclical variation of credit standards copyright 2004 oxford university press

quantifying the effect of renewable generation on day ahead electricity market prices the spanish case abstract the penetration of renewable generation has grown since the electricity sector has been deregulated to account for that this paper proposes a methodology to estimate the downward effect of renewable generation participation upon the day ahead electricity market prices since such an effect is quite intuitive observing the merit order of the generating units the european electricity market matching algorithm emma is currently based on euphemia price coupling of regions though there are several differences among countries across europe the new algorithm proposed uses market orders which include aggregate hourly orders such as aggregate supply and demand curves these orders are simple orders and the marginal price is affected by complex orders especially by the minimum income condition mic used in the iberian electricity market and considered in our proposed algorithm a case study of the spanish day ahead electricity market is evaluated for 2015 for which a daily generation sample is composed of 16 days in 2015 the sample is created following the characteristics of thermal production renewable production and inframarginal production the conclusions are drawn comparing the simulations of the real marginal prices and the new marginal prices after incorporating renewable generation participation into the aggregate demand curve at the maximum price

the impact of electricity storage on wholesale electricity prices this paper analyzes the impact of electricity storage on the production cost of a power system and the marginal cost of electricity electricity price using a unit commitment model also real world data has been analyzed to verify the effect of storage operation on the electricity price using econometric techniques the unit commitment model found that the deployment of a storage system reduces the fuel cost of the power system but increases the average electricity price through its effect on the power system operation however the reduction in the production cost was found to be less than the increase in the consumer s cost of electricity resulting in a net increase in costs due to storage different storage and co2 price scenarios were investigated to study the sensitivity of these results the regression analysis supports the unit commitment results and finds that the presence of storage increases average wholesale electricity prices for the case study system

lexicographic preferences in contingent valuation a theoretical framework with illustrations this paper considers some implications of l ordering an incommensurable preference model proposed in earlier cvliterature the structure and existence of inverse demand functions is shown to be a function of three elements the relationship between goods and wants wta wtp formats and the endowment of the good in a many to many relationship uncompensated and even compensated inverse demand functions may exist whereas a one to one relationship implicitly assumed in earlier literature does not necessarily produce either an illustration is provided in support of the theoretical framework especially the hypothesis that one to one relationship and high share of cv responses revealing lexicographic preferences are correlated

estimating the value of electricity storage in pjm arbitrage and some welfare effects significant increases in prices and price volatility of natural gas and electricity have raised interest in the potential economic opportunities for electricity storage in this paper we analyze the arbitrage value of a price taking storage device in pjm during the six year period from 2002 to 2007 to understand the impact of fuel prices transmission constraints efficiency storage capacity and fuel mix the impact of load shifting for larger amounts of storage where reductions in arbitrage are offset by shifts in consumer and producer surplus as well as increases in social welfare from a variety of sources is also considered

economic consequences of a capacity market implementation the case of poland abstract this paper investigates the potential economic consequences of setting up a capacity market in poland a computable model of the polish power generation system is developed and employed to analyse the impact of this mechanism two scenarios are designed for this study i a reference scenario that reflects the energy only market and ii a capacity market scenario that assumes the implementation of such an instrument to assess the economic consequences the following parameters are estimated i annual electricity prices ii loss of load hours iii expected energy not served and only for the capacity market scenario iv market clearing price v total budget of the capacity market and vi increase in electricity price due to the introduction of the capacity market the findings of the study indicate that the long term maintenance of the energy only market results in higher electricity prices when compared to putting a capacity market into operation introducing a capacity market enables existing resources to be used effectively without excessive capital expenditure the methods and conclusions presented in this paper provide valuable findings and policy insights regarding the potential economic consequences of a capacity mechanism in a power system mostly dominated by coal and undergoing an energy transition

preemptive patenting and the persistence of monopoly this article takes a different tack and inquires whether institutions such as the patent system create opportunities for firms with monopoly power to maintain their monopoly power the results apply to other situations such as brand identification spatial location and capacity expansion which share the characteristic that early or preemptive actions may lower the returns to potential competitors

modeling disinterest and dislike a bounded bayesian mixed logit model of the uk market for gm food mixed logit models represent a powerful discrete choice analytical model but require assumptions about the functional form of the parameter distributions the use of unbounded distributions such as the normal distribution may be regarded as unsuitable where theory indicates that all are negatively affected by increases in an attribute such as price bounded distributions such as the triangular and log normal are unable to model the case where a section of the population is indifferent towards an attribute while the remainder are negatively disposed toward it train and sonnier s bounded mixed logit model accommodates these features and is employed in this paper a censored normal and johnson s s b distribution are used to model preferences in the uk for food attributes including price and gm technology bi modal distributions are identified regarding gm food some are unlikely to ever consume it some are close to indifference and willing to consume at relatively small discounts while the remainder are fairly unresponsive to further price reductions

mixed logit model performance and distributional assumptions preferences and gm foods using mixed logit models to analyse choice data is common but requires ex ante specification of the functional forms of preference distributions we make the case for greater use of bounded functional forms and propose the use of the marginal likelihood calculated using bayesian techniques as a single measure of model performance across non nested mixed logit specifications using this measure leads to very different rankings of model specifications compared to alternative rule of thumb measures the approach is illustrated using data from a choice experiment regarding gm food types which provides insights regarding the recent wto dispute between the eu and the us canada and argentina and whether labelling and trade regimes should be based on the production process or product composition

model selection and misspecification in discrete choice welfare analysis this study extends the work by herriges and kling 1997 to further evaluate the impact of discrete choice modelling techniques on welfare measures particularly we evaluate the performance of the increasingly popular mixed logit model and the computational strategy for deriving discrete choice welfare measures our simulation results show that model misspecification can have profound effects on welfare measures in general the flexible mixed logit model performs relatively well in the presence of misspecification however when the nesting structure can be appropriately identified via statistical tests and a priori knowledge experience the nested logit model provides more reliable welfare measures than the mixed logit model

skew and attribute non attendance within the bayesian mixed logit model abstract we investigate non attendance to choice set attributes and the accommodation of preference heterogeneity within the mixed logit model we propose a generalisation of the mixed logit enabling the degree of skew of marginal utility distributions to be estimated the implementation is bayesian with the marginal likelihood used as an arbiter of model performance we find strong evidence of skew in the distributions of marginal utilities for most attributes models incorporating skew are preferred in all cases the irrelevance of an attribute to significant numbers of respondents is a possible cause of such skew we test alternative empirical accommodations of self reported attribute non attendance ana and continue to find strong evidence of skew in the distributions of marginal utilities even having accounted for ana we find that contrary to some recent findings respondents who report having ignored an attribute typically do indeed have a zero marginal utility for that attribute

bank income structure and risk an empirical analysis of european banks the purpose of this paper is to investigate the relationship between bank risk and product diversification in the changing structure of the european banking industry based on a broad set of european banks for the period 1996 2002 our study first shows that banks expanding into non interest income activities present higher risk and higher insolvency risk than banks which mainly supply loans however considering size effects and splitting non interest activities into both trading activities and commission and fee activities we show that the positive link with risk is mostly accurate for small banks and essentially driven by commission and fee activities a higher share of trading activities is never associated with higher risk and for small banks it implies in some cases lower asset and default risks

economics of electric energy storage for energy arbitrage and regulation in new york unlike markets for storable commodities electricity markets depend on the real time balance of supply and demand although much of the present day grid operates effectively without storage cost effective ways of storing electrical energy can help make the grid more efficient and reliable we investigate the economics of two emerging electric energy storage ees technologies sodium sulfur batteries and flywheel energy storage systems in new york state s electricity market the analysis indicates that there is a strong economic case for ees installations in the new york city region for applications such as energy arbitrage and that significant opportunities exist throughout new york state for regulation services benefits from deferral of system upgrades may be important in the decision to deploy ees market barriers currently make it difficult for energy limited ees such as flywheels to receive revenue for voltage regulation charging efficiency is more important to the economics of ees in a competitive electricity market than has generally been recognized