a review of policy analysis purpose and capabilities of electricity system models abstract the aim of this study is to investigate the ability of electricity system models to provide scenario based insights for policy purposes a framework is built from a review of existing studies of model characteristics and their linkages to model scenario types which are linked to the purpose of policy problem analyses the framework can be used as a tool to structure the examination of electricity system models and guide electricity system model selection and enhancement in light of policy problem driven analyses an illustration of the framework is presented by a review of german electricity model scenario studies the review shows that current models are used for the policy purpose of indicator assessment and instrument comparison by quantification of indicators such as monetary or pollution impacts however they are not suitable to provide the means for option reduction problem exploration and political or societal paradigm change exploration as the endogenous model structure for these is missing a particular lack of endogenous treatment was found for renewable technology capacity change and policies learning and productivity growth based technological change socio political technical interactions and limited demonstrated use of uncertainty treatment techniques

the use of the scaling property in a frontier analysis of a system of equations this article presents a one stage efficiency frontier analysis based on the scaling property this type of analysis is a not very often applied in empirical work in spite of its nice features due

beauty and the labor market the authors examine the impact of looks on earnings using interviewers ratings of respondents physical appearance plain people earn less than average looking people who earn less than the good looking the plainness penalty is 5 to 10 percent slightly larger than the beauty premium effects for men are at least as great as for women unattractive women have lower labor force participation rates and marry men with less human capital better looking people sort into occupations where beauty may be more productive but the impact of individuals looks is mostly independent of occupation suggesting the existence of pure employer discrimination copyright 1994 by american economic association

demand pull technology push and government led incentives for non incremental technical change abstract rising expectations about future demand for new technologies increase the incentives for investments in innovation by enlarging payoffs to successful innovations how well does this notion of demand pull apply to non incremental technological change when demand is largely attributable to actions by governments in this case inventors of the most important inventions did not respond positively to strong demand pull policies filing of highly cited patents declined precipitously just as demand for wind power created a multi billion dollar market three explanations for this apparent inconsistency with the demand pull hypothesis played a role 1 the rapid convergence on a single dominant design limited the market opportunity for non incremental technical improvements 2 even though the policies implemented were stringent enough to stimulate demand uncertainty in their longevity dampened the incentives for inventions that were likely to take several years to pay off and 3 alternative explanations such as declining r d funding and weakening presidential engagement on energy appear to have been important

a new product growth for model consumer durables this article originally appeared in management science january 1969 volume 15 number 5 pp 215 227 published by the institute of management sciences a growth model for the timing of initial purchase of new products is developed and tested empirically against data for eleven consumer durables the basic assumption of the model is that the timing of a consumer s initial purchase is related to the number of previous buyers a behavioral rationale for the model is offered in terms of innovative and imitative behavior the model yields good predictions of the sales peak and the timing of the peak when applied to historical data a long range forecast is developed for the sales of color television sets

economic indicators of resource scarcity a critical essay abstract the theoretical arguments of the conceptual and empirical literature on economic indicators of long run resource scarcity are logically flawed if resource allocators were informed of the nature of resource scarcity their behavior and the economic indicators it generates would reflect the scarcity but if they were so informed we could simply ask them if resources were scarce if they are not informed their behavior and economic indicators are as likely to indicate their ignorance as the reality unfortunately there is no way of knowing whether they are informed or not unless we already know whether resources are scarce

emergence of new economics energy transition models a review abstract well known academic and non academic institutions call for a new approach in economics able to capture features of modern economies including but not limited to complexity non equilibrium and uncertainty in this paper we provide a systematic review of ecological macroeconomic models that are suitable for the investigation of low carbon energy transitions and assess them based on the features considered desirable for a new approach in economics we draw two main conclusions firstly the knowledge base and structure of these existing ecological macroeconomic models are relevant alongside other types of models for the creation of a new approach in economics secondly the reviewed models are policy relevant especially in the context of the complexity and urgency of rapid energy transitions where increasingly policymakers require economic models able to capture real world characteristics however further improvements are needed to these models and future research should focus on i assuring comparability of models results and their policy insights ii incorporation of the relationships between macroeconomics finance and sustainability and iii the institutionalization of a new approach in economics

the charity beauty premium satisfying donors want versus should desires abstractdespite widespread conviction that neediness should be a top priority for charitable giving this research documents a charity beauty premium in which donors often choose beautiful but less needy charity recipients instead the authors propose that donors hold simultaneous yet incongruent preferences of wanting to support beautiful recipients who tend to be judged as less needy but believing they should support needy recipients the authors also posit that preferences for beautiful recipients are most likely to emerge when decisions are intuitive whereas preferences for needy recipients are most likely to emerge when decisions are deliberative these propositions are tested in several ways first when a beautiful recipient is included in basic choice sets this recipient becomes the most popular option and increases donor satisfaction second heightening deliberation steers choices away from beautiful recipients and toward needier ones third donors explicitly state that they want to

parametric estimation of technical and allocative inefficiency with panel data the error components approach to estimating allocative inefficiency imposes restrictive assumptions on the distributions of the errors and functional form the parametric approach does not require special assumptions about the error distribution or technology but typically assumes technical efficiency or restrictive functional forms the parametric approach also allows for systematic firm responses to shadow prices the authors generalize the parametric approach to a panel data setting and show that input and firm specific allocative inefficiency as well as firm specific technical inefficiency can be identified and estimated using a flexible functional form this is demonstrated empirically with an application to u s airlines copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

technological change in energy systems learning curves logistic curves and input output coefficients abstract learning curves have recently been widely adopted in climate economy models to incorporate endogenous change of energy technologies replacing the conventional assumption of an autonomous energy efficiency improvement however there has been little consideration of the credibility of the learning curve the current trend that many important energy and climate change policy analyses rely on the learning curve means that it is of great importance to critically examine the basis for learning curves here we analyse the use of learning curves in energy technology usually implemented as a simple power function we find that the learning curve cannot separate the effects of price and technological change cannot reflect continuous and qualitative change of both conventional and emerging energy technologies cannot help to determine the time paths of technological investment and misses the central role of r d activity in driving technological change we argue that a logistic curve of improving performance modified to include r d activity as a driving variable can better describe the cost reductions in energy technologies furthermore we demonstrate that the top down leontief technology can incorporate the bottom up technologies that improve along either the learning curve or the logistic curve through changing input output coefficients an application to uk wind power illustrates that the logistic curve fits the observed data better and implies greater potential for cost reduction than the learning curve does

on the equivalence of two normalizations in estimating shadow cost functions abstract we show that the shadow cost system that normalizes one price divergence parameter to unity is equivalent to the balk system that equates input costs based on actual and shadow prices which is a simultaneous equation not a seemingly unrelated regression sur system

the mineral economy how prices and costs can falsely signal decreasing scarcity abstract natural resource prices and costs of extraction have declined simultaneously with increasing quantities of extraction for a long time in a hotelling sense this indicates decreasing scarcity since low cost resources normally would be used first and quantities of extraction normally would decrease over time the main reason for the trend being opposite to hotelling characteristics is usually thought to be due to technological innovation however an alternative reason for decreasing costs and prices and increasing quantities of extraction may be due to georgescu roegen s georgescu roegen nicholas 1972 energy and economic myth in georgescu roegen nicholas ed energy and economic myths institutional and analytical economic essays published 1976 pergamon press new york pp 3 36 concept of bonanza where there is only the appearance of decreasing scarcity norgaard s norgaard r b 1990 economic indicators of resource scarcity a critical essay j environ econ manage 19 1 19 25 mayflower problem can be used to model an alternative neo classical approach to resource extraction and scarcity in this paper a model of resource exploration is developed where the explorer does not know total reserves of the resource base as he searches for and extracts the natural resource the explorer never entirely knows how big the resource base is but does gain information about the potential location of new reserves as discovery proceeds that reduces exploration costs the lower exploration costs can cause the price to fall over time until eventually scarcity of the resource causes the price to rise the true scarcity is only revealed towards the end of exhaustion the model shows that it is possible to have several years of increasing production simultaneous with lower prices and costs until a sudden intense price rise occurs with a huge cut in production when technology is able to cut costs and increase the reserve base the decline in prices and costs and the increase in production can last longer however even with better technology it is still possible for a sharp increase in price as long as demand is growing faster than technological innovation the problem is that the true size of the resource base is never known society does not know if technology is actually overcoming scarcity or not until demand for a resource outstrips supplies it is even possible for a price shock of incredible magnitude to surprise an economy within one or two years after a hundred years of declining prices and increasing production

ftt power a global model of the power sector with induced technological change and natural resource depletion abstract this work introduces a model of future technology transformations for the power sector ftt power a representation of global power systems based on market competition induced technological change itc and natural resource use and depletion it is the first component of a family of sectoral bottom up models of technology designed for integration into the global macroeconometric model e3mg itc occurs as a result of technological learning produced by cumulative investment and leads to highly nonlinear irreversible and path dependent technological transitions the model uses a dynamic coupled set of logistic differential equations as opposed to traditional bottom up energy models based on systems optimisation such differential equations offer an appropriate treatment of the times and structure of change involved in sectoral technology transformations as well as a much reduced computational load resource use and depletion are represented by local cost supply curves which give rise to different regional energy landscapes the model is explored for a single global region using two simple scenarios a baseline and a mitigation case where the price of carbon is gradually increased while a constant price of carbon leads to a stagnant system mitigation produces successive technology transitions leading towards the gradual decarbonisation of the global power sector

the decomposition of cost efficiency and the canonical form of cost function and cost share equations abstract this article discusses the decomposition of cost efficiency into parts relating to input or output technical efficiency and input allocative efficiency it derives the canonical forms for the specification of cost function and cost share estimation equations in the presence of technical and allocative inefficiency and in doing so integrates some hitherto unrelated lines of research

self affirmation through the choice of highly aesthetic products just as good looks bestow an unconscious beauty premium on people high aesthetics bestows an unrecognized benefit on consumer goods specifically choosing a product with good design affirms the consumer s sense of self choice of a highly aesthetic product was compared with choice of products superior on other attributes including function brand and hedonics to show that only aesthetics influences a consumer s personal values in study 1 a prior self affirming task leads to a decrease in choice share of a highly aesthetic option studies 2 and 3 mimic prior research on self affirmation with however choice of a highly aesthetic product replacing a traditional self affirmation manipulation choosing a product with good design resulted in increased openness to counter attitudinal arguments and reduced propensity to escalate commitment toward a failing course of action there are numerous implications of this form of self affirmation from public policy to retail therapy

technological diffusion and preference learning in the world of homo sustinens the challenges for politics abstract this article relates agents learning of a preference for a technology competition of technologies and their relative diffusion among potential adopters competitive interactions between two technologies are captured by an extended lotka volterra model to also incorporate preference learning on the part of potential adopters of these technologies we combine it with a model of cultural learning based on role model conformist and hedonistic learning our theoretical analysis is illustrated by a concrete example the competition between electric mobility and conventional forms of individual mobility the model enables an evaluation of specific policy instruments as to the promotion of sustainable technology

allocative inefficiency and its cost the case of spanish public hospitals in this paper we present a new empirical model based on an input distance function from which estimates of allocative inefficiency and its cost can be obtained the model avoids the greene problem which refers to the difficulty in practice of using a cost system to separate economic inefficiency into its technical and allocative components we also develop a procedure to calculate the cost of allocative inefficiency using a panel of spanish public hospitals to apply our methodology we find evidence of systematic allocative inefficiency in the employment of variable inputs since inputs are generally poor substitutes the cost of this allocative inefficiency is high

pathways to a low carbon economy for the uk with the macro econometric e3mg model this paper examines different carbon pathways for achieving deep co2 reduction targets for the uk using a macro econometric hybrid model e3mg which stands for energy economy environment model at the global level the e3mg with the uk as one of its regions combines a top down approach for modeling the global economy and for estimating the aggregate and disaggregate energy demand and a bottom up approach energy technology submodel etm for simulating the power sector which then provides feedback to the energy demand equations and the whole economy the etm submodel uses a probabilistic approach and historical data for estimating the penetration levels of the different technologies considering their economic technical and environmental characteristics three pathway scenarios cfh clc and cam simulate the co2 reduction by 40 60 and 80 by 2050 compared to 1990 levels respectively and are compared with a reference scenario ref with no reduction target the targets are modeled as the uk contribution to an international mitigation effort such as achieving the g8 reduction targets which is a more realistic political framework for the uk to move towards deep reductions rather than moving alone this paper aims to provide modeling evidence that deep reduction targets can be met through different carbon pathways while also assessing the macroeconomic effects of the pathways on gdp and investment

the dynamics of technology diffusion and the impacts of climate policy instruments in the decarbonisation of the global electricity sector this paper presents an analysis of climate policy instruments for the decarbonisation of the global electricity sector in a non equilibrium economic and technology diffusion perspective energy markets are driven by innovation path dependent technology choices and diffusion however conventional optimisation models lack detail on these aspects and have limited ability to address the effectiveness of policy interventions because they do not represent decision making as a result known effects of technology lock ins are liable to be underestimated in contrast our approach places investor decisionmaking at the core of the analysis and investigates how it drives the diffusion of low carbon technology in a highly disaggregated hybrid global macroeconometric model ftt power e3mg ten scenarios to 2050 of the electricity sector in 21 regions exploring combinations of electricity policy instruments are analysed including their climate impacts we show that in a diffusion and path dependent perspective the impact of combinations of policies does not correspond to the sum of impacts of individual instruments synergies exist between policy tools we argue that the carbon price required to break the current fossil technology lock in can be much lower when combined with other policies and that a 90 decarbonisation of the electricity sector by 2050 is affordable without early scrapping 2014 the authors published by elsevier ltd this is an open access article under the cc by license

modelling the effectiveness of climate policies how important is loss aversion by consumers abstracts reliable decarbonisation policies can only be developed with a thorough understanding of how consumers choose between energy technologies current energy models assume optimal consumer decisions which may result in expectations of the effectiveness of climate policies that are far too optimistic prospect theory on the other hand aims to model real life choices based on empirical observations that losses have a relatively larger influence on decisions than gains relative to a reference point here we show for the first time how loss aversion can be included into a global energy model with high spatial resolution using heating technology uptake as a case study we simulate the future heating technology diffusion for 59 world regions covering the globe with and without the consideration of loss aversion we find that ignoring the implications of loss aversion overestimates the market uptake of renewables in individual countries as well as on the global level as a consequence loss aversion results in higher projected co2 emissions by households and the need for much stronger policy instruments for achieving decarbonisation targets in the case of residential heating a carbon tax of 200 tco2 is projected to reduce overall emission levels to a similar extent than a carbon tax of 100 tco2 without the consideration of loss aversion even for similar degrees of decarbonisation accounting for loss aversion implies substantial changes in the underlying technology composition technology choices become subject to a conservative shift towards low carbon technologies which are relatively less efficient but already more established in local markets

oil futures a comparison of global supply forecasts this paper compares and evaluates fourteen contemporary forecasts of global supply of conventional oil and provides some observations on their relative plausibility despite the wide range of modelling approaches used and multiplicity of assumptions made it is shown that forecasts can be usefully compared along two dimensions namely shape of future production profile and assumed or implied ultimately recoverable resource of conventional oil other differences between forecasts are either secondary or are components of these two parameters the paper shows how large differences in the assumed size of the resource make relatively little difference to the timing of a global peak in conventional oil production it also examines the impact of rates of discovery reserves growth and depletion on the forecast date of peak and shows how forecasts that delay this peak until beyond 2030 rest on assumptions that are at best optimistic and at worst implausible

the impact of option popularity social inclusion exclusion and self affirmation on consumers propensity to choose green hotels previous research on consumers willingness to choose a green hotel has yielded mixed results with some studies indicating a positive relationship with the hotel s csr initiatives while others suggesting that there is no booking advantage for hotels going green the present research seeks to understand the social nature of green hotel booking decisions and proposes a conceptual framework elucidating three primary factors that underlie consumers propensity to choose a green hotel the study findings indicate that importantly a consumer s social relationship situation social inclusion vs social exclusion with other consumers self affirmation self value self concept reinforcement and the option popularity jointly influence consumers willingness to choose a green hotel the authors adopt a 2 2 2 factorial experimental design to test the proposed hypotheses theoretical and managerial implications are discussed

the impacts of the trade liberalization of environmental goods on power system and co2 emissions abstract the trade liberalization of environmental goods eg through as environmental goods agreement ega is crucial in low carbon electricity technology diffusion however there is a big gap of the eg definition lists and the integrated effectiveness analysis of ega this paper analyses the effects of the trade liberalization of eg based on macroeconomic and electricity sector models and attempts to find a more efficient eg trade policy by comparing different eg lists considering end use control and combining the eg policy with a carbon tax the results show that the trade liberalization of eg does not necessarily benefit the environment without other policies as the effects of the multiple end uses of eg on conventional energy might result in environmental damage we find that merging an ega into a global carbon tax system would enhance the effects of carbon tax on co2 reduction by 33 and simultaneously lower the gdp loss due to the carbon tax by 75 the economic benefits from the ega could offset the costs of other environmental policies thus end use control and other environmental policies should be considered at both the global and regional levels in the setting of international trade agreements that target eg

the effect of the normalisation of the shadow price vector on the cost function estimation abstract the shadow cost model can be estimated by adopting two different normalizations of the input price distortions however the normalization suggested by balk econ lett 55 1997 45 produces estimates not invariant to the choice of the shadow input price chosen as numeraire in order to obtain linear homogeneity of the cost function

on the global economic potentials and marginal costs of non renewable resources and the price of energy commodities a model is presented in this work for simulating endogenously the evolution of the marginal costs of production of energy carriers from non renewable resources their consumption depletion pathways and timescales such marginal costs can be used to simulate the long term average price formation of energy commodities drawing on previous work where a global database of energy resource economic potentials was constructed this work uses cost distributions of non renewable resources in order to evaluate global flows of energy commodities a mathematical framework is given to calculate endogenous flows of energy resources given an exogenous commodity price path this framework can be used in reverse in order to calculate an endogenous marginal cost of production of energy carriers given an exogenous carrier demand using rigid price inelastic assumptions independent of the economy these two approaches generate limiting scenarios that depict extreme use of natural resources this is useful to characterise the current state and possible uses of remaining non renewable resources such as fossil fuels and natural uranium the theory is however designed for use within economic or technology models that allow technology substitutions in this work it is implemented in the global power sector model ftt power policy implications are given

dynamics of energy technologies and global change technological choices largely determine the long term characteristics of industrial society including impacts on the natural environment however the treatment of technology in existing models that are used to project economic and environmental futures remains highly stylized based on work over two decades at iiasa we present a useful typology for technology analysis and discuss methods that can be used to analyze the impact of technological changes on the global environment especially global warming our focus is energy technologies the main source of many atmospheric environmental problems we show that much improved treatment of technology is possible with a combination of historical analysis and new modeling techniques in the historical record we identify characteristic l such network e ects yield high barriers to entry even for superior competitors these simple observations allow three improvements to modeling of technological change and its consequences for global environmental change one is that the replacement of long lived infrastructures over time has also replaced the fuels that power the economy to yield progressively more energy per unit of carbon pollution from coal to oil to gas such replacement has d they also include endogenous generation of s we show that doing so can yield projections with lessened environmental impacts without necessarily incurring negative e ect on the economy arriving on that path by the year 2100 depends on intervening actions such as incentives to promote greater diversity in technology and lower barriers to entry for new infrastructures that could accelerate historical trends of decarbonization 1999 elsevier science ltd all rights reserved

much ado about hotelling beware the ides of hubbert abstract much economic literature analyzes the hotelling principal little economic literature analyzes the hubbert curve although much controversy surrounds it this difference in emphasis by economists needs to be reconsidered critically and towards that end we attempt to look at both concepts simultaneously we test whether a simple hubbert curve model is a significant determinant of world oil price changes and whether one of the main determinants of the hotelling principle the discount rate also affects world oil prices an autoregressive distributed lag ardl bound testing approach is used to examine the effects of a hubbert index variable and a hotelling discount rate variable on the world wide price of oil results show the discount rate the most important hotelling variable has little effect on oil prices but that the hubbert curve model does show a large effect on oil prices oil is a non renewable natural resource par excellence yet the results suggest that the hotelling principle is not an important determinant for oil prices yet the hubbert curve and the theory surrounding the hubbert curve is an important determinant of oil prices