public employment and the business cycle we add a public employment sector to the basic search and matching model in order to study the business cycle impact of public wage and employment policies the government is assumed to follow exogenous rules for public wages and employment calibrated to match some cyclical features of us policies these features include a positive public wage premium and mildly procyclical public wages and employment we find that the presence of the public sector increases the volatility of employment and output

interaction among china carbon emission trading markets nonlinear granger causality and time varying effect abstract china makes great efforts to reduce carbon emissions and mitigate global greenhouse gas in order to identify the interaction among china cet markets this paper comprehensively investigates nonlinear granger causality and time varying effect in markets by using the hiemstra and jones hj test diks and panchenko dp test and time varying parameter structure vector autoregressive tvp svar model the empirical analysis has demonstrated china major cet markets significantly bidirectional nonlinear granger cause each other as to time varying effect we have obtained convincing findings that time varying impulse responses are among china major cet markets in the short term specifically guangdong hubei and shenzhen cet markets are time varying co movement negatively or positively related to each other over time implying there are deep bases for china national cet market construction furthermore the specific time point impulse effects support our discoveries in time varying impulse responses

vehicle scrappage and gasoline policy abstract we estimate the sensitivity of scrap decisions to changes in used car values and show how this scrap elasticity produces emissions leakage under fuel efficiency standards a process known as the gruenspecht effect we first estimate the effect of gasoline prices on used vehicle values and scrappage of vehicles with different fuel economies we then estimate the scrap elasticity itself which we find to be 0 7 when applied in a model of fuel economy standards 13 16 percent of the expected fuel savings leak away through the used vehicle market this effect rivals or exceeds the importance of the often cited mileage rebound effect jel h23 l62 l78 q35 q38 q48 q58

survey evidence on the willingness of u s consumers to pay for automotive fuel economy abstract prospect theory holds that human beings faced with a risky bet will tend to value potential losses about twice as much as potential gains previous research has demonstrated that prospect theory could be sufficient to explain an energy paradox in the market for automotive fuel economy this paper analyzes data from questions added to four commercial multi client surveys of 1000 u s households each in 2004 2011 2012 and 2013 households were asked about willingness to pay for future fuel savings as well as the annual fuel savings necessary to justify a given upfront payment payback periods inferred from household responses are generally consistent over time and across different formulations of questions mean calculated payback periods are about 3 years but there is substantial dispersion among individual responses the calculated payback periods do not appear to be correlated with the attributes of respondents respondents were able to quantitatively describe their uncertainty about both vehicle fuel economy and future fuel prices simulation of loss averse behavior based on respondents stated uncertainty illustrates how loss aversion could lead consumers to substantially undervalue future fuel savings relative to their expected value

1 000 cash back the pass through of auto manufacturer promotions automobile manufacturers frequently use promotions involving cash incentives while payments are nominally directed to either customers or dealers the ultimate beneficiary of the promotion depends on the outcome of price negotiation we use program evaluation methods to compare the incidence of these two types of promotions customers obtain 70 to 90 percent of a customer rebate but only 30 to 40 percent of a dealer discount promotion a 500 difference for a typical promotion our leading hypothesis is that pass through rates differ because of information asymmetries customer rebates are well publicized to customers while dealer discount promotions are not

energy efficiency and financial literacy abstract financial literacy explains anomalies in a wide range of consumers financial decisions we extend the literature on financial literacy by examining its role in the purchase of energy consumer durables a setting purported to suffer from sub optimal levels of investment due to consumer mistakes we augment a standard choice experiment for purchasing a hot water system with data on financial literacy financial literacy is an economically important and statistically significant determinant of investment in energy efficiency this result is robust to incorporating individual discount rates and risk aversion as well as standard controls such as income and education indicating that financial literacy is not merely a proxy for standard demographic characteristics financial literacy also makes choices more consistent with standard consumer preferences and increases the probability that respondents select investments with the lowest lifetime discounted costs the results establish low financial literacy as a mechanism driving low investment in energy efficiency

what explains the short term dynamics of the prices of co2 emissions using the vector auto regression var and the vector error correction models vecm this paper analyzes the short term dynamics of the prices of co2 emissions in response to changes in the prices of oil coal natural gas electricity and carbon emission allowances the results show that i a positive shock to the crude oil prices has a negative effect on the co2 allowance prices ii an unexpected increase in the natural gas prices raises the price of co2 emissions iii a positive shock to the prices of the fuel of choice coal has virtually no significant impact on the co2 prices iv there is a clear positive effect of the coal prices on the co2 allowance prices when the electricity prices are excluded from the var system and v a positive shock to the electricity prices reduces the price of the co2 allowances we also find that the energy price shocks have a persistent impact on the co2 allowance prices with the largest effect occurring six months after a shock strikes the effect is particularly strong in the case of the natural gas price shocks additionally we estimate that it takes between 7 3 and 9 6 months to halve the gap between the actual and the equilibrium prices of the co2 allowances i e to erase any price over or undervaluations after a shock strikes finally the empirical findings suggest an important degree of substitution between the three primary sources of energy i e crude oil natural gas and coal particularly when electricity prices are excluded from the var system

impacts of fuel economy improvements on the distribution of income in the u s abstract we estimate the impacts of passenger car and light truck fuel economy improvements in the u s since 1975 on the real monetary incomes of u s households by income quintile over the period 1980 2014 we limit our analysis to the direct monetary impacts fuel savings minus increased vehicle costs and do not attempt a full welfare analysis we include all vehicle purchases new and used household fuel expenditures come from the u s consumer expenditures surveys ces costs of increased new passenger car and light truck fuel economy were obtained from four national research council nrc studies plus a literature review of earlier estimates the nrc cost functions provide a unique time series of technology supply functions constructed by balanced expert panels and comprised of specific technologies proven to increase fuel economy effects of fuel economy improvements on used vehicle prices are based on an analysis of the ces data retrospective analysis indicates that all income quintiles received net savings and that the effect on the distribution of income was progressive a prospective analysis of future fuel economy improvements produced similar results sensitivity analysis indicates that these findings are relatively robust

energy efficiency of residential buildings in the european union an exploratory analysis of cross country consumption patterns abstract despite a common eu directive on energy efficiency in residential buildings levels of energy efficiency differ across european countries this article analyses these differences and investigates the effectiveness of different energy efficiency policies in place in those countries we firstly use panel data methods to explain average yearly energy consumption per dwelling and country by observable characteristics such as climatic conditions energy prices income and floor area we then use the unexplained variation by sorting between country differences as well as plotting within country changes over time to identify better performing countries these countries are analysed qualitatively in a second step we conduct expert interviews and examine the legal rules regarding building energy efficiency based on our exploratory analysis we draw a number of preliminary conclusions first we suggest that regulatory standards in conjunction with increased construction activity can be effective in the long run second the results suggest that carbon taxation represents an effective means for energy efficiency in this regard the scope of the carbon tax plays a crucial role we find evidence that a tax of 30 and a tax of 120 per ton of co2 cause markedly different reductions in energy consumption

automobile prices and quality did the gasoline price increases change consumer tastes in the u s a hedonic model of automobile prices that takes gasoline costs into account is developed and used to examine whether gasoline price increases especially those related to the 1973 and 1979 oil shocks changed consumer evaluations of the relative qualities of used cars in the u s during 1970 1981 we test the null hypothesis that the characteristics coefficients remained constant over time it is rejected if gasoline costs are excluded from the model but not if they are included alternative approaches are developed to show that the gasoline price increases alone can explain much of the observed changes in the coefficients

optimal monetary policy in a phillips curve world abstract in this paper we study optimal monetary policy in a model that integrates the modern theory of unemployment with a liquidity model of monetary transmission two policy environments are considered period by period optimization time consistency and full commitment ramsey allocation when the economy is subject to productivity shocks the optimal policy is pro cyclical we also characterize the long term properties of monetary policy and show that with commitment the optimal inflation rate is inversely related to the bargaining power of workers both results find empirical support in the data

modeling and forecasting the volatility of carbon emission market the role of outliers time varying jumps and oil price risk abstract the objectives of this study are three fold first we aim to assess whether outliers or extreme observations occur in the european union allowance eua data second we examine if time varying jumps are present in the carbon emission market third we use the crude oil volatility index ovx to investigate the effect of oil market uncertainty on the emission price volatility in order to detect the possible outliers in the eua market we employ a standard methodology proposed by ane et al 2008 and identify several outliers in the emission data after spotting and then removing those extreme points we apply the garch jump models to both original and outlier free observations the results of the jump model show that while time varying jumps do exist in the uncorrected data most of the jump parameters however become insignificant in case of outlier free observations next the application of an extended egarch model in which ovx is introduced in the garch specification demonstrates that emission prices are highly sensitive to oil market implied volatility and that the impact of ovx on the eua market appears to be asymmetric additionally the use of forecast encompassing test documents that considering the outlier free data and using the information content of ovx would improve the volatility forecasts for the carbon emission market the results of our research carry important implications for both investors and policymakers

is energy efficiency capitalized into home prices evidence from three u s cities abstract we test for evidence that energy efficiency features are capitalized into home prices in three u s metropolitan areas using hedonic regressions and multiple matching procedures we find that energy star certification is associated with higher sales prices in two of the markets the research triangle region of north carolina and portland oregon we find that local green certifications in portland and in austin texas are also associated with higher prices and that the estimated price impacts are larger than those from energy star matching on observables proves to be important in some cases reducing the estimated impacts compared with models without matching we calculate the implied energy savings from the estimated premiums and find that in the research triangle market the energy star premiums approximately equal the savings that program is designed to achieve but in portland the premiums are slightly greater than the program s savings due to low energy costs in the region

gasoline prices fuel economy and the energy paradox abstract policymakers often assert that consumers undervalue future gasoline costs when they buy automobiles we test this by measuring whether relative prices of vehicles with different fuel economy ratings fully adjust to variation in gasoline prices vehicle prices move as if consumers are indifferent between 1 00 in discounted future gas cost and 0 76 in vehicle purchase price we show how corrections for endogenous market shares and utilization measurement error and different gasoline price forecasts affect the results we also provide unique evidence of sticky information vehicle markets respond to changes in gasoline prices with up to a six month delay

making the implicit explicit a look inside the implicit discount rate implicit discount rates idrs are employed in energy models to capture household investment decisions yet the factors behind the idr and their respective implications for policy making usually remain blurred and fractional the proposed comprehensive framework distinguishes three broad categories of factors underlying the idr for household adoption of energy efficient technologies eets preferences notably over time risk loss debt and the environment predictable ir rational behavior bounded rationality rational inattention behavioral biases and external barriers to energy efficiency existing empirical findings suggest that the factors underlying the idrs that differ across household characteristics and technologies should be accounted for in energy models furthermore the framework allows for a fresh look at the interplay of idrs and policies we argue that a simple observation of high idrs or observing correlations between idrs and socio economic characteristics does not provide guidance for policy making since the underlying sources cannot be identified instead we propose that some of the factors underlying the idr notably external barriers can be changed through directed policy interventions whereas other factors notably preferences and predictable ir rational behavior are innate and can only be taken into account through reactive policy interventions

explaining the energy efficiency gap expected utility theory versus cumulative prospect theory abstract energy efficiency is one of the key factors in mitigating the impact of climate change and preserving non renewable resources although environmental and economic justifications for energy efficiency investments are compelling there is a gap between the observable and some notion of optimized energy consumption the so called energy efficiency gap behavioral biases in individual decision making have been resonated by environmental research to explain this gap to analyze the influence of behavioral biases on decisions upon energy efficiency investments quantitatively we compare expected utility theory with cumulative prospect theory on basis of a real world example we illustrate how the extent of the gap is influenced by behavioral biases such as loss aversion probability weighting and framing our findings indicate that cumulative prospect theory offers possible explanations for many barriers discussed in literature for example the size of the gap rises with increased risk and investment costs because behavioral biases are systematic and pervasive our insights constitute a valuable quantitative basis for environmental policy measures such as customer focused and quantitatively backed public awareness campaigns financial incentives or energy savings insurances in this vein this paper may contribute to an accelerated adaption of energy efficiency measures by the broader public

employer search training and vacancy duration we develop a model of optimal employer search strategy when information about match quality is endogenous the model is tested using four data sets two of which have not previously been used as theory predicts we find that when filling positions requiring more training employers search more intensively and extensively employers also search more extensively when hiring workers with more education and with prior experience these findings provide strong evidence of systematic variation in search strategies based on the characteristics of the positions and job applicants factors that influence employer search also affect the duration of a vacancy

product line rivalry and market segmentation with an application to automobile optional engine pricing this paper addresses the questions whether and when the pricing practices on base products may differ from those of premium products sold with options or add ons various alternative models are considered a monopoly model a model of brand rivalry with full consumer information and a model of rivalry in which consumers are only well informed about base product prices only the brand rivalry model with limited consumer information predicts that premium products have larger percentage markups than base products provided that brand rivalry is sufficiently intense empirical evidence on base and premium product pricing in the automobile market is consistent with the limited information model and inconsistent with the other two models

time varying correlations in oil gas and co2 prices an application using bekk ccc and dcc mgarch models previous literature has identified oil and gas prices as being the main drivers of co2 prices in a univariate generalized autoregressive conditional heteroscedasticity garch econometric framework alberola et al 2008 oberndorfer 2009 by contrast we argue in this article that the interrelationships between energy and emissions markets shall be modelled in a vector autoregressive var and multivariate garch mgarch framework so as to reflect the dynamics of the correlations between the oil gas and co2 variables overtime using the baba engle kraft kroner bekk constant conditional correlation ccc and dynamic conditional correlation mgarch dcc mgarch models on daily data from april 2005 to december 2008 we highlight significant own volatility cross volatility spillovers and own persistent volatility effects for nearly all markets indicating the presence of strong autoregressive conditional heteroscedasticity arch and garch effects besides we provide strong empirical evidence of tim

a large scale test of the effects of time discounting risk aversion loss aversion and present bias on household adoption of energy efficient technologies abstract this paper empirically and jointly analyses the relations between standard time discounting risk aversion loss aversion and present bias and household stated adoption of low to high stake energy efficiency technologies eets light emitting diodes leds energy efficient appliances and retrofit measures the analysis relies on a large representative sample drawn from eight european union countries preferences over time risk and losses were elicited and jointly estimated from participant choices in incentivized context free multiple price list experiments the findings from econometrically estimating eet adoption equations provide some support for the hypothesis that individuals who are more loss averse or more risk averse or who exhibit a lower time discount factor are less likely to have adopted eets yet some of the results significance levels and effect sizes appeared sensitive to the addition of covariates which may be an indication of bad controls finally omitting one or several of the parameters capturing preferences over time risk and losses when estimating the eet adoption equations did not appear to cause omitted variable bias

gasoline prices and the used automobile market a rational expectations asset price approach this paper examines the impact of changes in gasoline price expectations on the market values of used automobiles an asset model of automobile valuation is used to relate year to year changes in market values to changes in the present discounted value of gasoline expenses econometric evidence from data covering the years 1972 through 1981 substantially confirms the hypothesis of the model that a gasoline price shock causes relative price changes across automobile types in proportion to the differences in their rates of fuel consumption

output fluctuations at the plant level this paper examines the short run dynamics of manufacturing costs by detailing how plants in the u s automobile industry change output weekly data show a variety of margins on which firms adjust production these margins which are distinct from the usual factor demand choices differ in their lumpiness their adjustment costs and their variable costs the existence of these margins explains several empirical puzzles of output fluctuations using a theory of the short run dynamic cost function we are able to infer some of the characteristics of the underlying cost function from the dynamic behavior of the different margins

dynamic linkages among carbon energy and financial markets a smooth transition approach this article explores how price linkages between carbon allowances and market fundamentals in the eu emissions trading scheme eu ets vary over time i adopt a multivariate garch model that allows the conditional correlation between carbon energy and financial prices to change smoothly across regimes governed by functions of two transition variables that explain why price linkages vary i use i time as transition variable to allow for structural changes associated with institutional advances in the eu ets and ii implied volatility to account for heterogeneity in the behaviour of correlations in times of distress compared to calm periods the results point to a new pricing regime with much closer carbon energy price linkages in the second phase of the eu ets furthermore i find that correlations depend on market uncertainty conditions which exposes the link between carbon and financial markets due to common macroeconomic shocks during the current financial crisis

price drivers and structural breaks in european carbon prices 2005 2007 this article aims at characterizing the daily price fundamentals of european union allowances euas traded since 2005 as part of the emissions trading scheme ets the presence of two structural changes on april 2006 following the disclosure of 2005 verified emissions and on october 2006 following the european commission announcement of stricter phase ii allocation allows to isolate distinct fundamentals evolving overtime the results extend previous literature by showing that eua spot prices react not only to energy prices with forecast errors but also to unanticipated temperatures changes during colder events besides the sub period decomposition of the pilot phase gives a better grasp of institutional and market events that drive allowance price changes

the demand for cars and the price of gasoline the user cost approach the theory of the user cost of capital is used to estimate the demand for new and used cars in israel the results demonstrate that the price of operating costs must be included in the demand function they also show that the importance of gasoline price increases with engine size income elasticities are higher for new than for old cars and increase with engine size the inevitability of further increases in gasoline prices implies a further reduction in the average size of cars and a possible decline in the number of cars in the economy unless the trend is moderated by an acceleration in economic growth the future of the us auto industry will depend to a large extent on its ability to compete in the small and medium car markets 13 references 3 tables

student t distribution based var mgarch an application of the dcc model on international portfolio risk management significant second moment transmission effects and obvious time varying patterns of correlation coefficients among major equity and currency markets in the us japan and the uk are found to exist such observations inspire the time varying setting of dynamic conditional correlation coefficients in mgarch models on the other hand the multivariate student t distribution is suitable for analysing the visible leptokurtosis that is common in financial markets both are important for international portfolio risk management thus a comparison on the hedging efficiency of hypothetical portfolios consisting of stock and currency future positions is conducted in order to justify the multivariate student t distribution based on the dcc mgarch model

one discriminatory rent or double jeopardy multicomponent negotiation for new car purchases about half of new car transactions actually consist of two transactions one in which the customer buys a new car from a dealer and the other in which the customer sells his or her existing car to the dealer as a trade in at most dealerships both the price of the new car and the price of the trade in are negotiated in such negotiations as a general rule car dealers are willing to trade off profits made on the new car versus profits made on the trade in to an economist this suggests that the dealer may see the new car customer as the source of a certain amount of extractable profit one discriminatory rent that can be subdivided into two arbitrary buckets the new car margin and the trade in margin economic models of bargaining tend to use a similar paradigm modeling the amount of total economic surplus created by the transaction and supposing that each party will get a share of that surplus that is determined by the party s bargaining power it is usually recognized that there are multiple price mechanisms that could convey the same division of surplus to the two parties if this is indeed a good description of how new car negotiations unfold then an observer comparing a similar set of transactions should expect new car and trade in profit margins to be negatively correlated the better the deal the customer gets on a new car the less good the deal one should expect the customer to get on the trade in an alternative view of this multicomponent negotiation is that customers or dealers or competition and market structure

the effects of the corporate average fuel efficiency standards in the us this paper examines the effects of the corporate average fuel economy standards cafe on automobile sales prices and fuel consumption first a discrete choice model of automobile demand and a continuous model of vehicle utilization are estimated using micro data from the consumer expenditure survey for 1984 1990 next the demand side model is combined with a model of oligopoly and product differentiation on the supply side with these elements in place the effects of the cafe regulation are assessed through simulations and compared to the effects of alternative policy instruments such as an increase in gasoline tax

a market structure for an environment with heterogeneous job matches indivisible labor and persistent unemployment abstract the mortensen pissarides model with heterogeneous job matches and persistent unemployment has become a popular workhorse for studying aggregate phenomena in the labor market this paper develops a microeconomic structure decentralizing a generalized social planner s version of this model it is shown in the presence of the indivisibility of labor heterogeneous job matches and persistent unemployment that different households can fully insure themselves against variations in wealth if they have access to a complete insurance market also factor prices and matching rates are derived

individual time preferences and energy efficiency a large literature examines energy efficiency investments by consumers and firms partic ularly evaluation of the extent of and expla nations for an energy efficiency ee gap gerarden newell and stavins 2015 but prior studies have not considered the role of individ ual discount rates in such decisions instead most assessments assume a certain discount rate against which the rationality of observed choices is gauged allcott and wozny 2014 or alternatively estimate aggregate discount rates that best match observed ee decisions condi tional on an assumed decision model hausman 1979 the absence of evidence on the role of indi vidual discount rates is surprising because the profitability of ee investments depends fun damentally on the rate at which individuals discount future energy savings relative to the required upfront investment the potential importance of individual discount rates is further heightened by findings in experimental studies that elicited time preferences exhibit consider able heterogeneity frederick loewenstein and o donoghue 2002 this paper broadly examines the role of indi vidual discount rates in ee decisions our ear lier findings on information provision newell and siikamaki 2014 henceforth nsindicate that the efficacy of alternative labels in guiding cost efficient decisions depends critically on the discount rate used for analysis here we closely examine individual discount rates as a deter minant of the value households place on future energy savings our results demonstrate that individual dis count rates exhibit considerable heterogeneity

eu emission allowances and the stock market evidence from the electricity industry this paper constitutes to our best knowledge the first econometric analysis on stock market effects of the eu emission trading scheme eu ets our results suggest that eu emission allowance eua price developments matter to the stock performance of electricity firms eua price changes and stock returns of the most important european electricity corporations are shown to be positively related this effect does not work asymmetrically so that stock markets do not seem to react differently to eua appreciations in comparison to depreciations the carbon market effect is shown to be both time and country specific it is particularly strong for the period of eua market shock in early 2006 and differs with respect to the countries where the electricity corporations analysed are headquartered stock market reactions to eua volatility could not be shown

asymmetric causality between australian inbound and outbound tourism flows abstractwe employ the asymmetric version of the granger causality test to assess how australian inbound and outbound tourism flows across 49 markets countries are driven by the sign dependent variations in departure series or vice versa a multivariate generalized autoregressive conditional heteroscedasticity mgarch model is also estimated to study the time varying co volatility between inbound and outbound tourism growth rates we find that rising co volatility spillovers between inbound and outbound tourism are statistically significant for a number of markets the six markets that are most susceptible to global shocks are china hong kong papua new guinea singapore south africa and the united kingdom china is by far the largest of these markets and except for the united kingdom both arrivals and departures for each of these countries represent growing markets for australia we present recommendations for policymakers and destination management organizations dmos to assist in developing cust

off shore enhanced oil recovery in the north sea the impact of price uncertainty on the investment decisions although co2 capture and storage ccs is considered a key solution for co2 emission mitigation it is currently not economically feasible co2 enhanced oil recovery can play a significant role in stimulating ccs deployment because co2 is used to extract additional quantities of oil this study analyzes the investment decision of both a carbon emitting source and an oil company separately by adopting a real options approach it is shown that when uncertainty is integrated in the economic analysis co2 and oil price threshold levels at which investments in co2 capture and enhanced oil recovery will take place are higher than when a net present value approach is adopted we also demonstrate that a tax on co2 instead of an emission trading system results in a lower investment threshold level for the investment in the co2 capture unit furthermore we determine a minimum co2 selling price between the two firms and show that co2 eor has the potential to pull ccs into the market by providing an additional revenue on the capture plant however when co2 permit prices are above an identifiable level the eu ets does not necessarily result in the adoption of ccs and stimulates oil production

explaining electricity demand and the role of energy and investment literacy on end use efficiency of swiss households abstract this paper estimates the level of transient and persistent efficiency in the use of electricity in swiss households using the newly developed generalized true random effects model gtrem an unbalanced panel dataset of 1994 swiss households from 2010 to 2014 collected via a household survey is used to estimate an electricity demand frontier function we further investigate whether energy and investment literacy have an influence on the household electricity consumption the results show significant inefficiencies in the use of electricity among swiss households both transient 11 and persistent 22 we note that the high persistent inefficiency is indicative of structural problems faced by households and systematic behavioral shortcomings in residential electricity consumption these results indicate a considerable potential for electricity savings and thus reaching the reduction targets defined by the swiss federal council as part of the energy strategy 2050 wherein end use efficiency improvement is one of the main pillars the results support a positive role of energy and in particular investment literacy in reducing household electricity consumption policies targeting an improvement of these attributes could help to enhance efficiency in the use of energy within households

u s federal government subsidies for clean energy design choices and implications abstract subsidies for clean energy deployment have become a major component of u s federal energy and climate policy after a surge in spending under the american recovery and reinvestment act of 2009 they are an even larger component but now face increased scrutiny given their lasting presence how does one design these subsidies to be as cost effective as possible surprisingly the conceptual framework and empirical evidence available to help policymakers identify which subsidies generate the most bang for the buck are limited to help answer this question we begin with an overview of the justifications for and the arguments against subsidizing clean energy technologies next we briefly describe major subsidies finally we summarize key design choices suggesting an increased focus on upfront cash payments for physical outcomes such as capacity this contrasts with the considerable focus on tax credits loan guarantees production and cost based subsidies which have been more prominent to date

deconstructing the energy efficiency gap conceptual frameworks and evidence abstract energy efficient technologies offer considerable promise for reducing the financial costs and environmental damages associated with energy use but these technologies appear not to be adopted to the degree that appears justified even on a purely private basis we present two complementary frameworks for understanding this so called energy paradox or energy efficiency gap first we build upon previous literature by dividing potential explanations for the energy efficiency gap into three categories market failures behavioral anomalies and model and measurement errors second we examine the elements of cost minimizing energy efficiency decisions the typical benchmark used in assessing the gap s magnitude

declining us output volatility and its effect on labour flow volatility an mgarch analysis this article analyses flow rates of us workers between employment and unemployment using new quarterly data for the period 1967 to 2002 multivariate garch models are used to investigate links between flow rate volatilities the results suggest that links changed substantially in the mid 1980s coinciding with the documented decline in output volatility these changes in adjustment dynamics are consistent with a move to greater use of hours rather than worker adjustment

the estimation of frictional unemployment a stochastic frontier approach this paper reports an estimate of the frictional unemployment rate in u s manufacturing that is derived from a parametric statistical method for estimating stochastic frontiers the steady state perfect foresight solution to an estimated employment growth frontier provides a locus of technically efficient frictional rates of unemployment the mean frictional unemployment rate during the sample period is estimated to be 3 7 percent of the manufacturing labor force this estimate conforms closely to an estimate of 3 5 percent that is derived from manufacturing sector data presented by david m lilien 1980 for roughly the same time period copyright 1991 by mit press

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

the energy efficiency gap what does it mean abstract as renewed attention has been given by policy makers to energy conservation issues it has frequently been asserted that an energy efficiency gap exists between actual and optimal energy use the critical questions is how to define the optimal level of energy efficiency this paper seeks to disentangle some confusing strands of argument that are frequently brought to bear on this question by identifying the major conceptual issues that determine the set of feasible answers we identify five separate and distinct notions of optimality the economists economic potential the technologists economic potential hypothetical potential the narrow social optimum and the true social optimum each of these has associated with it a corresponding definition of the energy efficiency gap our analysis demonstrates that necessary preconditions for identifying the right measure of the energy efficiency gap include understanding and disentangling market failure and non market failure explanations for the gradual diffusion of energy efficient technologies

are consumers myopic evidence from new and used car purchases abstract we investigate whether car buyers are myopic about future fuel costs we estimate the effect of gasoline prices on short run equilibrium prices of cars of different fuel economies we then compare the implied changes in willingness to pay to the associated changes in expected future gasoline costs for cars of different fuel economies in order to calculate implicit discount rates using different assumptions about annual mileage survival rates and demand elasticities we calculate a range of implicit discount rates similar to the range of interest rates paid by car buyers who borrow we interpret this as showing little evidence of consumer myopia jel d12 h25 l11 l62 l71 l81

modeling asymmetric comovements of asset returns existing time varying covariance models usually impose strong restrictions on how past shocks affect the forecasted covariance matrix in this article we compare the restrictions imposed by the four most popular multivariate garch models and introduce a set of robust conditional moment tests to detect misspecification we demonstrate that the choice of a multivariate volatility model can lead to substantially different conclusions in any application that involves forecasting dynamic covariance matrices like estimating the optimal hedge ratio or deriving the risk minimizing portfolio we therefore introduce a general model which nests these four models and their natural asymmetric extensions the new model is applied to study the dynamic relation between large and small firm returns article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

quality based price discrimination and tax incidence the market for gasoline and diesel cars in europe the existing tax policies toward gasoline and diesel cars in european countries provide a unique opportunity to analyze quality based price discrimination and the implied tax incidence in my econometric framework consumers choose the type of engine based on their annual mileage prices are set by the manufacturers the relative pricing of gasoline and diesel cars appears to be consistent with monopolistic price discrimination effectively segmenting low mileage from high mileage consumers on average about 75 to 90 of the price differentials between gasoline and diesel cars can be explained by markup differences i draw implications for the effectiveness and the revenue effects of tax policy

energy prices and co2 emission allowance prices a quantile regression approach we use a quantile regression framework to investigate the impact of changes in crude oil prices natural gas prices coal prices and electricity prices on the distribution of the co2 emission allowance prices in the united states we find that i an increase in the crude oil price generates a substantial drop in the carbon prices when the latter is very high ii changes in the natural gas prices have a negative effect on the carbon prices when they are very low but have a positive effect when they are quite high iii the impact of the changes in the electricity prices on the carbon prices can be positive in the right tail of the distribution and iv the coal prices exert a negative effect on the carbon prices

price dynamics in the european union emissions trading system and evaluation of its ability to boost emission related investment decisions abstract the price of permits in the european union emissions trading system eu ets has historically been highly sensitive and prone to jumps we consider different stochastic processes to model the price of permits and show that the variance gamma vg model provides the best fit for the price distribution among a selection of infinite activity processes using this result as a starting point we assess the effects of the eu ets in delivering low carbon investments at the firm level by modeling a price taker electricity producer subject to the eu ets jurisdiction we compute via least squares monte carlo the value of the real option the greenhouse gas emitter has consisting in the opportunity to switch from its current high carbon technology to a cleaner one we use a vg specification for carbon prices and a mean reverting brennan schwartz process for the price of fuel moreover we further analyze the investment decision problem in case of a co 2 price stabilization mechanism in the form of a price floor by explicitly computing the expected value of the investment project by means of fourier methods our results show that the introduction of the price stabilization mechanism significantly affects the timing of the investment decision and supports emission related investments