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

the economics of a blend mandate for biofuels a biofuel blend mandate may increase or decrease consumer fuel prices with endogenous oil prices depending on relative supply elasticities biofuel tax credits always reduce fuel prices tax credits result in lower fuel prices than under a mandate for the same level of biofuel production if tax credits are implemented alongside mandates then tax credits subsidize fuel consumption instead of biofuels this contradicts energy policy goals by increasing oil dependency co 2 emissions and traffic congestion while providing little benefit to either corn or ethanol producers these social costs will be substantial with tax credits costing taxpayers 28 7 billion annually by 2022 copyright 2008 oxford university press

bankable permits for the control of environmental pollution abstract intertemporal trading of emission permits banking is often identified as one of three promising market mechanisms for controlling pollution along with averaging and trading surprisingly the efficiency properties of permit banking systems have not been investigated using a simple optimal control model this paper investigates firms incentives for banking or borrowing emission permits and compares the emission and output streams firms would choose with the socially optimal solution we find that in many cases firms will suboptimally choose excessive damage and output levels in early periods and correspondingly too few in later periods if given the opportunity to freely move emissions between time periods we propose a simple alternative trading scheme we term modified banking that counters this problem and should be no more difficult for an environmental authority to implement than a straigth banking system

demystifying rins a partial equilibrium model of u s biofuels markets abstract we explore four fundamental channels of mandate compliance available under current u s biofuel policy increased ethanol blending through e10 or e85 increased biodiesel blending and a reduction in the overall compliance base simulation results highlight the interplay and varying importance of these channels at increasing blend mandate levels in addition we establish how rin prices are formed the value of a rin in equilibrium is shown to reflect the marginal cost of compensating the blender for employing one additional ethanol equivalent unit of biofuel this contrasts with existing research equating the price of rins to the gap between ethanol supply and demand evaluated at the mandate level we demonstrate the importance of this distinction in case of binding demand side infrastructure constraints such as the ethanol blend wall as percentage blend mandates increase the market for low ethanol blends may contract in order to reduce the overall compliance base this has important implications for implied ethanol demand in the economy

comparing policies to confront permit over allocation abstract instability in cap and trade markets particularly with respect to permit price collapses has been an area of concern for regulators to that end several policies including hybrid price quantity mechanisms and the newly introduced market stability reserve msr systems have been introduced and even implemented in some cases i develop a stochastic dynamic model of a cap and trade system parameterized to values relevant to the european union s emission trading system eu ets to analyze the performance of these policies aimed at adding stability to the system or at least at reducing perceived over allocations of permits results suggest that adaptive allocation mechanisms such as a price collar or msr can reduce permit over allocations and permit price volatility in a more cost effective manner than simply reducing scheduled permit allocations however it is also found that the performance of these adaptive allocation policies and in particular the msr are greatly affected by assumed discount rates and policy parameters

a symmetric safety valve abstract how to set policy in the presence of uncertainty has been central in debates over climate policy concern about costs has motivated the proposal for a cap and trade program for carbon dioxide with a safety valve that would mitigate against spikes in the cost of emission reductions by introducing additional emission allowances into the market when marginal costs rise above the specified allowance price level we find two significant problems both stemming from the asymmetry of an instrument that mitigates only against a price increase one is that most important examples of price volatility in cap and trade programs have occurred not when prices spiked but instead when allowance prices collapsed second a single sided safety valve may have unintended consequences for investment we illustrate that a symmetric safety valve provides environmental and welfare improvements relative to the conventional one sided approach

market efficiency and the u s market for sulfur dioxide allowances focusing on the u s sulfur dioxide so2 allowance market from its inception in 1994 to 2009 we model allowance prices to determine the influence of market fundamentals on allowance price level and volatility we find evidence that the so2 market operates in ways that are not inconsistent with an efficient market prices that reflect marginal abatement costs after the first few years of the program but before a court decision that introduced significant uncertainty into the market in mid 2008 our empirical analysis finds that the so2 market similar to other emission markets studied in the literature can remain relatively inefficient for several years after launch we also find that market volatility increases in response to all types of communications from the administrator suggesting that the development of a formal communication strategy possibly similar to that used by central banks would reduce price volatility and increase the efficiency of the market

compliance path and impact of ethanol mandates on retail fuel market in the short run past studies have examined the impact of ethanol mandates with a long run perspective and were thus able to assume away short run rigidities and some of the specifics of the biofuel mandates these studies have been of limited use in informing current policy debates because the short to medium run reality is one of strong regulatory and infrastructure rigidities that restrict how ethanol can be consumed in the united states our objectives in this paper are to provide a more coherent framework than currently exists to model and understand how compliance with ethanol mandates in the short run cannot be met with conventional gasoline blends how compliance impacts fuel prices and consumer and producer welfare and also to measure the size of the transfer that occurs between refineries and ethanol producers through the market s renewable identification numbers rins in a model calibrated to 2015 data we find that the effects of increasing ethanol mandates that are physically feasible are close to zero on the retail price of gasoline this result is robust to different gasoline prices supply elasticities and export demand elasticities increased mandates can have a large negative effect on the price of high level ethanol gasoline blends such as e85 if the mandates are increased to approach consumption capacity

firm level corruption in vietnam abstractthis article uses panel data from a survey of small and medium sized enterprises in vietnam to uncover which firms pay bribes and which do not we also study how bribe paying evolved between 2005 and 2007 and test how the determinants of bribes changed between the two years three sets of insights emerge first bribe incidence is highly associated with firm level differences in visibility sunk costs ability to pay and some but not all types of interaction with public officials second the magnitudes of bribes are distinctly higher for firms which get preferential tax benefits and government contracts third the observed decrease in bribe incidence between 2005 and 2007 is largely driven by significant behavioral changes these behavioral changes seem to be associated with policy initiatives to improve law enforcement and increased media focus on punitive actions against corruption

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

identifying supply and demand elasticities of agricultural commodities implications for the us ethanol mandate we present a new framework to identify supply elasticities of storable commodities where past shocks are used as exogenous price shifters in the agricultural context past yield shocks change inventory levels and futures prices of agricultural commodities we use our estimated elasticities to evaluate the impact of the 2009 renewable fuel standard on commodity prices quantities and food consumers surplus for the four basic staples corn rice soybeans and wheat prices increase 20 per cent if one third of commodities used to produce ethanol are recycled as feedstock with a positively skewed 95 percent confidence interval that ranges from 14 to 35 per cent jel q11 q16 q42 q48

commodity storage and the market effects of biofuel policies the author 2016 legislation passed in 2007 by the u s congress increased by about 1 3 billion bushels the net amount of corn required to be processed annually into ethanol for motor fuel use we estimate that corn prices were about 30 higher from 2006 to 2014 than they would have been without this demand increase we develop a partially identified structural vector autoregression model our identification strategy is unique in the literature because it enables us to estimate the effects of transitory shocks such as weather separately from the effects of persistent shocks such as the increased ethanol mandate moreover by only partially identifying our model we show how to generate robust conclusions without strong identifying assumptions

on the suboptimality of s 1 s lost sales inventory policies abstract this paper considers replenishment policies for the continuous review inventory model with poisson demand a fixed lead time on replenishment and lost sales during a stockout there is a time dependent stockholding cost and a cost per unit of sale lost but there is no or negligible cost associated with placing a replenishment order the standard policy is to specify a maximum stock level s and place a replenishment order whenever a demand occurs and is met this is commonly referred to as an s 1 s policy it is shown that there are other replenishment policies which give lower cost solutions in fact it is demonstrated that an s 1 s policy can never be optimal if s 2

measuring corruption in infrastructure evidence from transition and developing countries abstract this paper examines what we can say about the extent and impact of corruption in infrastructure using existing evidence there is evidence that most perceptions measures appear to be very weak proxies for the actual extent of corruption in the infrastructure sector largely but inaccurately measuring petty rather than grand corruption survey evidence is more reliable but limited as a tool for differentiating countries in terms of access to infrastructure finance or appropriate policy models the paper suggests that a focus on bribe payments as the indicator of the costs of corruption in infrastructure may be misplaced

partially overlapping time series a new model for volatility dynamics in commodity futures in commodity futures markets contracts with various delivery dates trade simultaneously applied researchers typically discard the majority of the data and form a single time series by choosing only one price observation per day this strategy precludes a full understanding of these markets and can induce complicated nonlinear dynamics in the data in this paper i introduce the partially overlapping time series pots model to model jointly all traded contracts the pots model incorporates time to delivery storability seasonality and garch effects i apply the pots model to corn futures at the chicago board of trade and the results uncover substantial inefficiency associated with delivery on corn futures the results also support two theories of commodity pricing the theory of storage and the samuelson effect copyright 2005 john wiley sons ltd

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

when to pollute when to abate intertemporal permit use in the los angeles nox market we study intertemporal trading of nitrogen oxides permits in southern california s reclaim program we model reclaim s distinct intertemporal features two overlapping permit cycles and two overlapping compliance cycles in the model competitive equilibrium is cost effective and firms have an incentive to delay abatement from 1994 to 2006 reclaim facilities traded intertemporally by using permits of the opposite cycle we test two theoretical propositions delayed abatement and trading across cycles with a difference in differences estimator and show weak though inconclusive support of the theory the theoretical and empirical results are relevant to cap and trade programs with potential for overlapping permit cycles jel q58

political decentralization and corruption evidence from around the world abstract how does political decentralization affect the frequency and costliness of bribe extraction by corrupt officials previous empirical studies using subjective indexes of perceived corruption and mostly fiscal indicators of decentralization have suggested conflicting conclusions in search of more precise findings we combine and explore two new data sources an original cross national data set on particular types of decentralization and the results of a firm level survey conducted in 80 countries about firms concrete experiences with bribery in countries with a larger number of government or administrative tiers and given local revenues a larger number of local public employees reported bribery was more frequent when local or central governments received a larger share of gdp in revenue bribery was less frequent overall the results suggest the danger of uncoordinated rent seeking as government structures become more complex

implications of market mediated emissions and uncertainty for biofuel policies abstract biofuel policies affect global agricultural and oil commodity markets whose response has consequences for greenhouse gas ghg emissions estimates of the net ghg impact of biofuel policies are wide ranging and shrouded in uncertainty we perform a monte carlo experiment using a stylized model of the global liquid fuel market and compare different biofuel policies with respect to global ghg emissions and global oil consumption taking iluc emissions into consideration we find that for the currently commercial biofuels inclusion of iluc emissions as part of the policy rating of biofuels ghg intensity i likely leads to lower emissions ii leads to greater reduction in both domestic and global oil consumption iii leads to higher price of fuels in the home region all compared to when iluc emissions are excluded from the policy rating and iv does not however ensure that emissions absolutely decline owing to fuel market effects which unlike iluc are presently excluded from all existing fuel ghg regulations sensitivity analysis suggests that iluc emissions and the price elasticity of oil supply are the greatest contributors to variance in net global ghg emissions under any given policy

a review of low carbon fuel policies principles program status and future directions a low carbon fuel standard lcfs is a market based policy that specifies declining standards for the average lifecycle fuel carbon intensity afci of transportation fuels sold in a region this paper i compares transportation fuel carbon policies in terms of their economic efficiency fuel price impacts greenhouse gas emission reductions and incentives for innovation ii discusses key regulatory design features of lcfs policies and iii provides an update on the implementation status of lcfs policies in california the european union british columbia and oregon the economics literature finds that an intensity standard implicitly taxes emissions and subsidizes output the output subsidy results in an intensity standard being inferior to a carbon tax in a first best world although the inefficiency can be corrected with a properly designed consumption tax or mitigated by a properly designed carbon tax or cap and trade program in california from 2011 to 2015 the share of alternative fuels in the regulated transportation fuels pool increased by 30 and the reported afci of all alternative fuels declined 21 lcfs credit prices have varied considerably rising to above 100 credit in the first half of 2016 lcfs programs in other jurisdictions share many features with california s but have distinct provisions as well c 2016 elsevier ltd all rights reserved

market design in cap and trade programs permit validity and compliance timing abstract cap and trade programs have considerable heterogeneity in permit validity and compliance timing for example permits have different validities across time e g banking borrowing and seasons and space e g zonal restrictions and compliance timing can be annual in overlapping cycles or in multi year periods we discuss nine prominent cap and trade programs along these dimensions and construct a general model of permit validity and compliance timing we derive sufficient conditions under which abatement is invariant to compliance timing i e compliance timing cannot smooth abatement cost shocks under these conditions i expected compliance costs are invariant ii the variance of compliance costs increases with the delayed compliance iii equilibrium prices may not be unique and iv the delayed compliance equilibrium may rely on degenerate prices not determined by marginal abatement costs we demonstrate the model s broad applicability by illustrating different types of temporal permit validity

price discontinuities in the market for rins abstract in the last few years a market has emerged for renewable identification numbers rins a unique 28 character alphanumeric code assigned to each domestically produced and imported gallon of renewable fuel as with many commodity markets the arrival of new information can lead to unexpectedly rapid changes or jumps in prices this suggests that rins prices may follow a more complex process than geometric brownian motion gbm we investigate the potential presence of jumps as well as time varying volatility in the spot price for rins our results demonstrate that allowing for jumps and time varying volatility provides statistically important improvements in the modeling of prices relative to gbm both jumps and time varying volatility can contribute to the fatness of the tails in the distribution of price returns which has implications for investments in capital projects linked to renewables

impact of inventory inaccuracy on service level quality in q r continuous review lost sales inventory models this article focus on the behavior of a q r continuous review lost sales inventory model exposed to an inventory record inaccuracy iri an unusual phenomenon has been observed which runs counter to certain empirical practices in the smes based on the principle that safety stock is only necessary for certain intervals in the data inaccuracy rate both analytical results and simulation modeling are proposed to investigate the relationship between the quality of service safety stock and inventory inaccuracy under demand variations it is shown that the service level quality is a non monotone function of the inaccuracy rate i e the service level quality increases up to an iri level and subsequently decreases other inaccuracy distribution functions have produced the same phenomena with constant demand as well as with demand fluctuations finally another noteworthy result also shows the same phenomenon between the function involving a level of safety stock defined by simulation and the function between the service level quality and iri these different observed results are discussed in terms of both their contribution to the q r inventory management policies in smes and of the limitations to this study

lost sales problems with stochastic lead times convexity results for base stock policies we consider a single location inventory system with periodic review and stochastic demand it places replenishment orders to raise the inventory position that is inventory on hand plus inventory in transit to exactly s at the beginning of every period the lead time associated with each of these orders is random however the lead time process is such that these orders do not cross demand that cannot be met with inventory available on hand is lost permanently we state and prove some sample path properties of lost sales inventory on hand at the end of a period and inventory position at the end of a period as functions of s the main result is the convexity of the expected discounted sum of holding and lost sales costs as a function of s this result justifies the use of common search procedures or linear programming methods to determine optimal base stock levels for inventory systems with lost sales and stochastic lead times it should be noted that the class of base stock policies is suboptimal for such systems and we are primarily interested in them because of their widespread use

the economics of pollution permit banking in the context of title iv of the 1990 clean air act amendments abstract this paper presents a model of the collective emission permit banking behavior of electricity generating units affected by title iv of the clean air act amendments of 1990 a rigorous treatment of the constraint that pollution permits cannot be borrowed from future allocations is introduced this approach enables an analysis of the impact of future changes in electricity demand regulations and technologies on the present permit price and emissions level the effect of uncertainty on the banking behavior is also explored

second best biofuel policies and the welfare effects of quantity mandates and subsidies abstract the quest for biorenewable energy sources is held to justify a number of government interventions including support policies for biofuels such as those responsible for the recent rapid growth of us ethanol production this article provides an analytical assessment of such policies we construct a general equilibrium open economy model that captures the rationale typically invoked to justify government intervention in this setting to alleviate the environmental impact of energy consumption and to decrease us energy dependence on foreign sources the model is used to study both the positive and normative implications of alternative policy instruments including the subsidies and mandates specified by the 2007 energy independence and security act from a positive perspective we find that biofuels mandates are equivalent to a combination of fuel taxes and biofuels subsidies that are revenue neutral from a welfare perspective we show that biofuels mandates dominate biofuels subsidies and that combining fuel taxes with mandates would be welfare enhancing

how petty is petty corruption evidence from firm surveys in africa summary evidence suggests that corruption is costly for african firms this paper however shows that a minor difference in the way the question on bribe payments is asked has a large effect on estimates of the size of the burden on average firms report payments that are between 4 and 15 times higher when they report them as a percent of sales than when they report them in monetary terms the paper discusses several possible reasons for this but none explain the difference one plausible remaining reason is that firm managers overestimate bribes when they report them in percentage terms

a model of intertemporal emission trading banking and borrowing abstract this paper provides a general treatment of emission trading banking and borrowing in an intertemporal continuous time model using optimal control theory the decentralized behavior of firms is shown to lead to the least cost solution attainable under joint cost minimization explicit solutions for the time paths of emissions and permit prices are derived when firms are allowed to both bank and borrow and when firms are only allowed to bank emission permits the policy implications of emission banking and borrowing are discussed

allowance price drivers in the first phase of the eu ets abstract in the first phase of the eu emissions trading scheme eu ets the price per ton of co 2 initially rose to over 30 the price then collapsed to essentially zero by mid 2007 by deriving a structural model of the allowance price under the assumption of efficient markets i examine the extent to which this variation in price can be explained by marginal abatement costs i then gradually relax the model by allowing for delayed adjustment of price to fundamentals as well as by introducing lagged lhs variables the pattern of results suggests that while prices were not initially driven by marginal abatement costs this inefficiency was largely corrected after the accounting of 2005 emissions in april 2006

combining price and quantity controls to mitigate global climate change abstract uncertainty about compliance costs causes otherwise equivalent price and quantity controls to behave differently and leads to divergent welfare consequences although most of the debate on global climate change policy has focused on quantity controls due to their political appeal this paper argues that price controls are more efficient simulations based on a stochastic computable general equilibrium model indicate that the expected welfare gain from the optimal price policy is five times higher than the expected gain from the optimal quantity policy an alternative hybrid policy combines both the political appeal of quantity controls with the efficiency of prices using an initial distribution of tradeable permits to set a quantitative target but allowing additional permits to be purchased at a fixed trigger price even sub optimal hybrid policies offer dramatic efficiency improvements over otherwise standard quantity controls for example a 50 trigger price per ton of carbon converts the 3 trillion expected loss associated with a simple 1990 emission target to a 150 billion gain these results suggest that a hybrid policy is an attractive alternative to either a pure price or quantity system

global biofuels key to the puzzle of grain market behavior these jumps in the prices of these three major grains have also revealed the these jumps in the prices of these three major grains have also revealed the chaotic state of economic analysis of agricultural commodity markets economists chaotic state of economic analysis of agricultural commodity markets economists and scientists have engaged in a blame game apportioning percentages of responand scientists have engaged in a blame game apportioning percentages of responsibility for price spikes to bewildering lists of factors which include a surge in meat sibility for price spikes to bewildering lists of factors which include a surge in meat consumption caused by unprecedented increases of income of the vast populations consumption caused by unprecedented increases of income of the vast populations of china and india idiosyncratic regional droughts and fi res speculative bubbles a of china and india idiosyncratic regional droughts and fi res speculative bubbles a new fi nancialization of grain markets the slowdown of global agricultural research new fi nancialization of grain markets the slowdown of global agricultural research spending jumps in costs of energy and fertilizers shifts in interest rates the decline spending jumps in costs of energy and fertilizers shifts in interest rates the decline of the dollar the surge in biofuels demands bans on genetically modifi ed plants of the dollar the surge in biofuels demands bans on genetically modifi ed plants and climate change several observers have claimed to identify a perfect storm in and climate change several observers have claimed to identify a perfect storm in the grain markets in 2007 2008 a confl uence of some of the factors listed above the grain markets in 2007 2008 a confl uence of some of the factors listed above the continuing confused state of the economics of grain price volatility may the continuing confused state of the economics of grain price volatility may seem odd after all grain markets have many of the features of textbook competiseem odd after all grain markets have many of the features of textbook competitive models the products are relatively uniform their primary producers and tive models the products are relatively uniform their primary producers and ultimate consumers are atomistic price takers prices and outputs in the united ultimate consumers are atomistic price takers prices and outputs in the united states and other developed countries are unusually well measured by the standards states and other developed countries are unusually well measured by the standards of most goods and services in the world economy with data freely available from of most goods and services in the world economy with data freely available from

eight questions about corruption this paper will discuss eight frequently asked questions about public corruption 1 what is corruption 2 which countries are the most corrupt 3 what are the common characteristics of countries with high corruption 4 what is the magnitude of corruption 5 do higher wages for bureaucrats reduce corruption 6 can competition reduce corruption 7 why have there been so few recent successful attempts to fight corruption 8 does corruption adversely affect growth

biofuel related price transmission using renewable identification number prices to signal mandate regime this paper improves on existing methods of testing price links between biofuels petroleum petroleum products and agricultural commodity feedstocks by incorporating information contained in the prices of renewable identification numbers rins that are used for biofuel mandate compliance theoretical equations are developed to show the role rin prices can play in the relationships among energy biofuel and agricultural commodity prices rin price data are used a to infer values of fuels where market data are unavailable and b to define binding and non binding mandate regimes a specific empirical exercise exploits the rin price data to conduct cointegration tests on high frequency data representing spot and futures prices relating to ethanol and biodiesel from february 2009 through march 2015 finding little evidence of short term biofuel and petroleum product substitution during this period

corruption and market competition evidence from post communist countries summary this paper empirically examines whether market competition is associated with greater bribe payments we use firm level data from the business environment and enterprise performance surveys since market competition could be endogenous and some firms report zero bribes we employ a tobit estimation methodology instrumenting for market competition we find that greater market competition increases the amount of bribes paid results are robust across several measures of market competition however market competition is less strongly associated with bribes in the presence of other obstacles of doing business that could also lead to more bribes

soft and hard price collars in a cap and trade system a comparative analysis we use a stochastic dynamic framework to compare price collars price ceilings and floors in a cap and trade system with uncertainty in the level of baseline emissions and costs we consider soft collars which provide limited volume of additional emission allowances a reserve at the price ceiling and hard collars which provide an unlimited supply of additional allowances thereby preventing allowance prices from exceeding the price ceiling conversely allowances are removed from the market if prices fall to the floor we find that increasing the size of the reserve strictly lowers expected net present values of compliance costs however there is a diminishing effect as the allowance reserve is expanded most of the expected cost savings are achieved with a modest reserve consequently a rather limited soft price collar could provide considerable assurance about cost while preventing the possibility that emissions could spiral out of control

a controlled field experiment on corruption abstract this paper reports on a controlled field experiment on corruption designed to address two important issues the experimenter s scrutiny and the unobservability of corruption in the experiment a grader is offered a bribe along with a demand for a better grade we find that graders respond more favorably to bigger bribes while the effect of higher wages is ambiguous it lowers the bribe s acceptance but it fosters reciprocation monitoring and punishment can deter corruption but we cannot reject that it may also crowd out intrinsic motivations for honesty when intensified finally our results suggest several micro determinants of corruption including age ability religiosity but not gender

continuous review lost sales inventory models with poisson demand a fixed lead time and no fixed order cost abstract this paper considers continuous review lost sales inventory models with no fixed order cost and a poisson demand process there is a holding cost per unit per unit time and a lost sales cost per unit the objective is to minimise the long run total cost base stock policies are in general sub optimal under lost sales the optimal policy would have to take full account of the remaining lead times on all the orders currently outstanding and such a policy would be too complex to analyse let alone implement this paper considers policies which make use of the observation that for lost sales models base stock policies can be improved by imposing a delay between the placement of successive orders the performance of these policies is compared with that of the corresponding base stock policy and also with the policy of ordering at fixed and regular intervals of time

modified base stock policies for continuous review lost sales inventory models with poisson demand and a fixed lead time abstract this paper reconsiders the lost sales inventory system studied by hill 2007 the commonly assumed policy to apply to the system is a pure base stock policy pbsp for which the best base stock is easily found hill shows that his simple delay policy sdp and full delay policy fdp perform better the sdp is a s d policy where s is the base stock of the best pbsp and d is a common lower bound on the delay between the placement of successive replenishment orders we show by simulation that the d value suggested by johansen 2001 outperforms hill s suggestion and that the performance often can be further improved by optimizing d for the test bed investigated by hill we show that for some parameter settings an additional improvement is achieved when s and d are optimized simultaneously the policy suggested by johansen performs better than the fdp in all settings where the former policy reduces the average cost of the best pbsp by at least 1

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

how market efficiency and the theory of storage link corn and ethanol markets this article uses the theories of market efficiency and supply of storage to develop a conceptual link between the corn and ethanol markets and explores statistical evidence for the link we propose that a long run no profit condition is established in distant futures markets for ethanol corn and natural gas and then use the theory of storage to define an inter temporal equilibrium among these prices the relationship shows that under certain conditions future price expectations will influence nearby futures prices and that a short term relationship between input and output prices will exist we demonstrate validity of the theory using a structural price model and then by means of time series techniques

gender and corruption in business abstractare firms with female owners or managers less corrupt than other firms we test this question using firm level data on corruption ownership and management we find that women in positions of influence are associated with less corruption female owners are associated with a lower incidence of bribery and report smaller levels of bribery moreover corruption is seen as less of an obstacle in companies where women are represented in top management by providing evidence that women are associated with lower levels of corruption in business our research contributes to the literature on development gender equality and corruption

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

why firms engage in corruption a top management perspective this study builds upon the top management literature to predict and test antecedents to firms engagement in corruption building on a survey of 341 executives in india we find that if executives have social ties with government officials their firms are more likely to engage in corruption further these executives are likely to rationalize engaging in corruption as a necessity for being competitive the results collectively illustrate the role that executives social ties and perceptions have in shaping illegal actions of their respective firms

taxes and bribes in uganda abstractusing data from 433 firms operating along uganda s charcoal and timber supply chains we investigate patterns of bribe payment and tax collection between supply chain actors and government officials responsible for collecting taxes and fees we examine the factors associated with the presence and magnitude of bribe and tax payments using a series of bivariate probit and tobit regression models we find empirical support for a number of hypotheses related to payments highlighting the role of queuing capital at risk favouritism networks and role in the supply chain we also find that taxes crowd in bribery in the charcoal market

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

pure and modified base stock policies for the lost sales inventory system with negligible set up costs and constant lead times abstract the studied inventory system with continuous review has an easily computed optimal s 1 s policy when unsatisfied demands are backlogged we assume that unsatisfied demands are lost and then it is also easy to compute the best s 1 s policy but as demonstrated by roger hill at the isir symposium in 1996 this pure base stock policy can never be optimal if s 2 our focus is on periodic review we use erlang s loss formula to derive approximate expressions for the stockout probability and the average cost these expressions are used to approximate the average cost and to compute a good base stock we formulate and implement a markov decision model to find the optimal replenishment policy the model is solved by a policy iteration algorithm because the optimal policy is often rather complicated we introduce modified base stock policies they are specified by a pair s t where s is the base stock and t is a lower bound for the number of review periods between review epochs in which placing a replenishment order is permitted a simple one has s equal to the base stock computed from erlang s formula and fixes t as the largest integer which is less than or equal to the ratio of the number of review periods per delivery period and s our numerical examples show that the simple modified base stock policy provides most of the cost reduction which can be obtained by replacing the best pure base stock policy by the optimal policy

using micro surveys to measure and explain corruption summary this paper discusses survey techniques aimed at a better measurement of corruption at the micro level and argues that with appropriate survey methods and interview techniques it is possible to collect quantitative micro level data on corruption public expenditure tracking surveys service provider surveys and enterprise surveys are highlighted with several applications these surveys permit measurement of corruption at the level of individual agents such as schools health clinics or firms they also permit the study of mechanisms responsible for corruption including capture of public funds and bribery 2005 elsevier ltd all rights reserved

bribe or die gender differences in entrepreneurship in emerging markets this paper examines the relation between gender differences in entrepreneurship and firm level bribery one of the most impactful business obstacles to private sector growth using data from a comp

impacts of ethanol policy on corn prices a review and meta analysis of recent evidence abstract the literature on the impacts of biofuels on agricultural commodity prices is characterized by contradictory findings we review studies published between 2007 and 2014 that estimate the effects of u s corn ethanol policy on corn prices and find estimates ranging from nil to over 80 such divergent results make it difficult to assess the merits of alternative biofuel policies to bring more clarity to the issue and facilitate comparisons across studies we assemble a database of over 150 medium to long run estimates of the effect of corn ethanol production on corn prices from 29 published studies we first normalize corn price impacts by the change in corn ethanol volume to control for the large differences in ethanol quantities across scenarios we then conduct a meta analysis to identify the factors that drive the remaining variation in corn price impacts across studies in addition to ethanol volumes we find that modeling framework projection year inclusion of ethanol co products and biofuel production from other feedstocks explain much of the differences in price effects the results indicate that a one billion gallon expansion of the us corn ethanol mandate in the year 2015 would lead to a three to four percent increase in corn prices with smaller price changes projected in future years

managing permit markets to stabilize prices the political economy of environmental policy favors the use of quantity based instruments over price based instruments e g tradable permits over green taxes at least in the united states with cost uncertainty however there are clear efficiency advantages to prices in cases where the marginal damages of emissions are relatively flat such as with greenhouse gases the question arises therefore of whether one can design flexible quantity policies that mimic the behavior of price policies namely stable permit prices and abatement costs we explore a number of quantity plus policies that replicate the behavior of a price policy through rules that adjust the effective permit cap for unexpectedly low or high costs they do so without necessitating any monetary exchanges between the government and the regulated firms which can be a significant political barrier to the use of price instruments

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

flex fuel vehicle adoption and dynamics of ethanol prices lessons from brazil abstract focusing on dynamics of the relative prices of substitute fuels namely ethanol and gasoline this study quantifies the impact of the increase in shares of flex fuel vehicles ffvs in the vehicle fleet on the domestic ethanol prices in brazil a modified partial adjustment model is employed estimation results provide strong support for our research hypotheses i when consumers can choose between the fuels the relative ethanol and gasoline prices converge to a long run equilibrium level which is determined by the fuel economy and ii price dynamics are largely determined by market supply and demand factors including the price of sugar ethanol exports and composition of vehicle fleet furthermore the impacts of demand factors such as ethanol exports are strengthened by the increasing proportion of ffvs in the vehicle fleet

event studies in economics and finance the event study is an important research tool in economics and finance the goal of an event study is to measure the effects of an economic event on the value of firms event study methods exploit the fact that given rationality in the marketplace the effects of an event will be reflected immediately in security prices thus the impact can be measured by examining security prices surrounding the event in this paper event study methods are described including some of the potential complications an example is included to illustrate the approach

investment in cellulosic biofuel refineries do waivable biofuel mandates matter we develop a conceptual model to study the impact of mandate policies on stimulating investment in cellulosic biofuel refineries in a two period framework we compare the first period investment level fil under three scenarios laissez faire non waivable mandate nwm policy and waivable mandate wm policy results show that when plant level marginal costs are increasing then both nwm policy and wm policy may stimulate fil the wm policy has a smaller impact than does the nwm policy when the plant level marginal costs are constants however wm policy does not increase fil but does increase the expected profit of more efficient investors copyright 2012 oxford university press