the value of value pricing of roads second best pricing and product differentiation abstract some road pricing demonstrations use value pricing in which travelers can choose between a free but congested roadway and a priced roadway recent research has uncovered a potentially serious problem for such demonstrations second best tolls may be far lower than those typically charged and from a welfare perspective the latter may be worse than not pricing at all that research however assumes that all travelers are identical and it therefore neglects the benefits of product differentiation using a model with two user groups we find that accounting for heterogeneity in value of time is important in evaluating constrained policies and improves the relative performance of policies that offer differential prices

the economic and financial gains from water markets in chile abstract chile is one of the few countries that has encouraged the use of markets in water resource management in order to assess the impact of water markets and transactions costs in chile four river valleys the maipo elqui limari and the azapa were selected as case studies transactions from the elqui and limari valleys during the years 1986 to 1993 were analyzed to determine the gains from trade from market transfers in the economic and financial analysis of water markets crop budgets were used to estimate the value of water in agricultural production the value of water use rights to urban water supply companies was estimated using the avoided cost of an alternative investment in a water storage reservoir the analysis demonstrated that the market transfer of water use rights does produce substantial economic gains from trade in both the elqui and limari valleys these economic gains produce rents for both buyers and sellers but buyers especially farmers growing profitable crops who buy water use rights and individuals buying water use rights for potable water supply receive higher rents then sellers large table grape producers in the limari valley and individuals buying water for human consumption in the elqui valley received the highest rents in the elqui valley net gains from trade per share were within the range of recent transfer prices of us 1000 in the limari valley gains from trade per share are 3 4 times the recent prices of us 3000 for a share of water from the cogoti reservoir where trading was active especially in the limari valley transactions costs have not presented an appreciable barrier to trading nonetheless in the large canal systems with fixed flow dividers in the elqui and maipo valley there have been very few transactions various factors contribute to the lack of trading but the absence of trading in these large canal systems highlights the costs of modifying fixed infrastructure especially for trades between farmers

information asymmetry and traceability incentives for food safety abstract we define traceability by its precision that is the probability of finding the source of a problem we consider a downstream food processor firm principal that sets traceability precision and contingent payments so to induce homogeneous upstream suppliers agents to exert the principal s preferred level of food safety effort we focus on cases in which food safety crises originate from defects in raw material provided by upstream firms to analytically show that high precision can substitute for high intensive contingent payments and vice versa and thus traceability is not an unequivocal signal for safer food contrary to previous results in the literature we also show that government regulation based on mandatory traceability with sanctions may not necessarily lead to safer food while increasing the food processor s costs finally we use our analytical results to give managerial feedbacks for firms adopting and considering traceability

demand side management policies for residential water use who bears the conservation burden to assess the potential for urban demand side management dsm policies as a water resource management tool we analyze the extent to which price and alternative policy instruments such as use and quantity restrictions and subsidies for water efficient technologies reduce residential demand and their distributional implications by type of household using detailed household level panel data for two california communities the results suggest that the ultimate effects of dsm policies in terms of the reduction in aggregate demand and distribution of water savings among household classes depend both on the policy instrument selected and the composition of aggregate demand

statistical models of consumer behavior with heterogeneous values and constraints in a market with heterogeneous individuals the fact that a particular group of individuals are the consumers of a particular product already indicates that there exist systematic differences between them and the average person simple tools from statistical theory are used here to analyze the implications of consumer diversity it is argued that an increase in consumer diversity will increase the gains from trade and that there is a shadow price of heterogeneity associated with product quality throughout the discussion the significance of consumer self selection and the distinction between average and marginal will be emphasized

distributional consequences of airport congestion pricing abstract imposition of airport congestion pricing redistributes welfare among commercial regional and general aviation this article extends daniel s econometrica63 327 370 1995 stochastic bottleneck model with dynamically adjusting traffic rates queuing delays and congestion fees to include elastic demand heterogeneous operating time preferences and heterogeneous layover and queuing time values using parameters from minneapolis st paul airport simulations of congestion pricing determine its effects on equilibrium traffic patterns queuing delays schedule delays airport revenues and social welfare gains by commercial aviation common travelers and airport authorities exceed losses by general and regional aviation the article evaluates several price and rebate programs and proposes several that are self financing and pareto improving

the econometrics of kinked budget constraints in the last several years a branch of applied econometrics has developed which is devoted to the development of techniques for the estimation of demand and other functions when the budget constraint is piecewise linear or kinky that is when the constraint consists of a number of segments joined together at kink points such constraints most frequently arise from government tax and transfer programs for example the federal income tax imposes a piecewise linear schedule by the use of constant marginal tax rates within brackets a problem analyzed by hausman 1981 the payroll tax in the social security system likewise generates a kinked schedule inasmuch as the marginal tax rate on earnings is zero above a certain earnings maximum federal and state transfer programs for the poor result in piecewise linear constraints because transfer benefits are taxed in the sense of a negative income tax as income rises and because that tax rate falls to zero at the kink point where an individual or family loses eligibility for the benefit altogether many government transfer programs impose additional nonlinearities by altering this tax rate by discrete amounts over the range of positive benefits as well but kinked constraints sometimes arise in nongovernment contexts a well known example being the block pricing schedule commonly set by utilities and volume discounting in general kinked budget constraints create two difficulties that have several interesting facets one difficulty is that changes in tax and transfer schedules can have unexpected effects that can be exactly the opposite in sign to those expected from economic theory examples of this phenomenon are given below the second difficulty that with which this paper is mostly concerned relates to the implications of kinked budget

do droughts have long term effects on water consumption evidence from the urban area of barcelona this article examines the long term effects of droughts on water consumption using data of municipalities of the urban area of barcelona two important characteristics of the sample of municipalities are the relatively low water consumption in the pre drought period and the fact that indoor uses are clearly predominant controlling for prices income and various socio demographic factors we find a reduction in water consumption not only during the drought episode but also in subsequent periods these permanent reductions in water use may be explained by household behavioural changes technological changes or structural water policy changes

responses to changes in domestic water tariff structures a latent class analysis on household level data from granada spain a problem that affects the estimation of water demand functions is the presence of unobserved individual heterogeneity which means that a common demand function is unlikely to represent the behavior of all users we implement latent class models to estimate water demand functions for four groups of users who are classified according to their unobservable preferences this more flexible approach makes it possible to distinguish four different response patterns to changes in the drivers of water use including different price elasticities these results should be of particular interest to regulators who would like to tailor water demand management policy to heterogeneous users our analysis exploits household level panel data on residential water demand and consumers characteristics obtained by combining information from a survey of 1 465 domestic users in the city of granada and bimonthly price and consumption data supplied by this city s water supplier from the period 2009 2011

measuring the impact of water supply interruptions on household welfare water scarcity frequently leads to a need for rationing the choice of an adequate rationing method should be based on the impact on consumer welfare that is produced by each rationing plan some rationing schemes such as the frequently used supply interruption method can be regarded as changes in the characteristics of the good in this case time availability that do not modify the pre set consumer budget under the standard theoretical restrictions on consumer behavior compensating or equivalent variations surpluses cannot be used to identify the impacts of these methods on household welfare in this paper we propose a set of sufficient conditions with respect to the utility function that allows for the evaluation of the compensating or equivalent variations surpluses associated with changes in goods quality even if those goods are considered to be essential for consumers we use these conditions to compare the welfare losses associated with the water supply cuts implemented in seville spain to those that would result if water was instead rationed using price changes

high and declining prices signal product quality high and declining prices signal a high quality product high prices are the efficient means of signaling because the consequent loss of sales volume is most damaging for lower cost lower quality products as time passes and the number of informed consumers increases the signaling distortion lessens resulting in a declining price profile the prediction of high and declining prices is robust across a variety of dynamic models and is consistent with recent empirical findings copyright 1991 by american economic association

a discrete continuous choice approach to residential water demand under block rate pricing reply waldman is quite correct in noting that the microeconomic theory of block rate pricing in hewitt and hanemann hh 1995 is given for the general case of a k block rate structure whereas the econometric theory is largely confined to the case of exactly two blocks the extension in waldman to the more general case of k blocks is correct although the extension itself could be even more general if it addressed the nonnegativity of demand as is demonstrated below that no apparent attention was paid to the nonnegativity of demand in hh may be attributed to the fact that the need to do so was negated by a fortuitous assumption in the earlier work although that assumption that the errors are multiplicative and lognormally distributed was only maintained and not tested in hh i now estimate two models with the more common assumptions of linear demand and additive and normally distributed errors both with and without a modification for

stability of perishable goods in cold logistic chains abstract we consider that production and logistics facilities in the supply chain are positioned between the origin and the supply market or in a part of it any changes in time distance or temperature in the chain could cause the net present value of the activities and their added value in the supply chain to be perturbed in reality the perturbations can be robust the natural question arises is to what are the effects of some perturbations in a supply chain in its production or distribution part on the stability of perishable goods in such systems and what is the appropriate control which keeps the product on the required level of quality and quantity at the final delivery these analyses are especially important to assure the stability of cold chains in the cold chains management ccm what conditions should be fulfilled to assure that after such robust perturbations of parameters and especially time delays lead times and some other delays the behaviour of the logistics chain would still be within the prescribed limits the formulation obtained in the time domain will be compared with the formulation in the frequency space introduced by grubbstrom in his paper on the application of the laplace transform to certain economic problems manage sci 7 1967 558 and with the later studies of his school their model was extended by the authors to the complete logistic chain where location and with it also the distance between the activity cells of logistic chain play an important role

stochastic considerations of grubbstrom molinder model of mrp input output and multi echelon inventory systems abstract in a recent paper grubbstrom and molinder 1994 grubbstrom and molinder studied theoretically the dynamic relationship between mrp input output analysis and multi echelon inventory systems in this paper we upgrade this approach including in the model the uncertainty of external demand and decision theory elements in the model we suppose that we know only the upper and lower bounds of external demand rate and because of lack of information that the external demand is uniformly distributed the complete decision model for our case is considered and the advantages of this approach are demonstrated

estimates from a consumer demand system implications for the incidence of environmental taxes abstract most studies suggest that environmental taxes are regressive making them less attractive policy options we consider the distributional effects of a gasoline tax increase using four incidence measures and under three scenarios for gas tax revenue use to incorporate behavioral responses we use consumer expenditure survey data to estimate a consumer demand system that includes gasoline other goods and leisure our estimates confirm that when revenues are not recycled a gasoline tax is regressive use of incidence measures that ignore demand responses however will substantially overstate this regressivity in contrast the differences between the equivalent variation and easier to implement consumer surplus measures are relatively small in addition our results suggest that using the additional gas tax revenue to fund labor tax cuts makes the policy substantially less regressive while using the revenue to fund lump sum transfers actually makes it progressive

household water demand seasonal elasticities a stone geary model under an increasing block rate structure using household level panel data from tucson arizona and a unique set of highly disaggregated control variables we estimate residential demand for water via a stone geary specification the stone geary functional form allows price elasticity of demand to vary with quantity consumed price and income and enables estimation of a threshold level of consumption below which demand is considered perfectly price inelastic an encompassing test of consumer price response reveals evidence favoring a lagged average price specification rather than one using lagged marginal price the estimated model also finds substantial seasonal variation in price elasticity and declining consumer price responsiveness

discussing the parameters of preservation of perishable goods in a cold logistic chain model the paper discusses the parameters of preservation of perishable goods in cold logistic chains the key parameters are the intensity of deterioration of goods the conservation effect of perishable goods and the delay of activation of the conservation effect the values of these parameters determine the quantity of the product being deteriorated in the logistic chain and the extent to which the deterioration can be alleviated econometric estimation thus presents the quantity effects of preservation procedures whereas the financial effects can be derived using the proper price categories in the calculation of the net present value or the annuity stream in this way one can determine whether the implementation of preservation procedures is more rational than the purchase of an attainable insurance policy

stochastic properties of a production inventory process with planned production using transform methodology abstract we consider a stochastic inventory process in which demand is generated by individual events separated by independent stochastic time intervals whereas production takes place in batches of possibly varying sizes at different points in time the resulting processes are analysed using laplace transform methodology expressions for inventory and stockouts are developed applying the theory of residues an example includes poisson distributed demand intervals assuming costs for set ups for carrying inventory and for stockouts conditions are developed for determining the optimal production policy on the one hand when applying the traditional average cost measure on the other when applying the annuity stream principle

conceptual developments in the economics of transportation an interpretive survey the objective in this paper is to survey the literature in transportation economics exploring two basic themes first the conceptual developments in the analysis of supply and demand which recognizes noteworthy aggregation biases in the empirical work on aggregate data and indicate that a correct analysis of the issues should take place at a highly disaggregated level second the use of these conceptual developments to evaluate efficiency aspects of transportation pricing investment and the impact of government regulation on resource allocation and distribution in the transportation sector it is important to acknowledge that the survey is based on research throughout the world but our institutional perspective and to some extent the topics that are covered is based largely on the u s experience author

the substantial bias from ignoring general equilibrium effects in estimating excess burden and a practical solution we show that under typical conditions the simple excess burden triangle formula substantially underestimates the excess burden of commodity taxes in some cases by a factor of 10 or more this formula performs poorly because it ignores general equilibrium interactions most important interactions between the taxed commodity and the labor market many prior studies have shown that general equilibrium interactions affect excess burden but have not appreciated the bias associated with ignoring these interactions or the quantitative importance of this bias we derive an implementable alternative to the simple formula this alternative formula captures interactions that the simple formula omits as a result it is both unbiased and usually more accurate

the econometrics of piecewise linear budget constraints a survey and exposition of the maximum likelihood method in this article maximum likelihood techniques for estimating consumer demand functions when budget constraints are piecewise linear are exposited and surveyed consumer demand functions are formally derived under such constraints and it is shown that the functions are themselves nonlinear as a result the econometric problems in estimating such functions are exposited and the importance of the stochastic specification is stressed in particular the specification of both unobserved heterogeneity of preferences and measurement error econometric issues in estimation and testing are discussed and the results of the studies that have been conducted to date are surveyed

the value of scarce water measuring the inefficiency of municipal regulations abstract rather than allowing urban water prices to reflect scarcity rents during periods of drought induced excess demand policy makers have mandated command and control approaches primarily rationing the use of water outdoors while such policies are ubiquitous and likely inefficient economists have not had access to sufficient data to estimate their economic impact using unique panel data on residential end uses of water in 11 north american cities we examine the welfare implications of urban water rationing in response to drought using estimates of expected marginal prices that vary both across and within markets we estimate price elasticities specific to indoor and outdoor water use our results suggest that current policies do target water uses that households themselves are most willing to forgo nevertheless we find that rationing outdoor water in cities has costly welfare implications primarily due to household heterogeneity in willingness to pay for scarce water we find that replacing rationing policies with a market clearing drought price would result in welfare gains of more than 29 of what households in the sample spend each year on water

estimating the welfare effect of congestion taxes the critical importance of other distortions within the transport system abstract this paper extends the first best analysis of peak period congestion pricing to account for interactions with other distortions within the transport system including congestion on unpriced routes accident and pollution externalities suboptimal transit pricing and gasoline taxes we illustrate how the presence of each of these distortions changes the welfare effect of a congestion tax over a wide range of parameter scenarios in all cases the welfare changes are potentially significant implying that these distortions are important to consider in an economic evaluation of congestion taxes

water security through scarcity pricing and reverse osmosis a system dynamics approach water supply and demand planning is often conducted independently of social and economic strategies there are presently no comprehensive life cycle approaches to modelling urban water balances that incorporate economic feedbacks such as tariff adjustment which can in turn create a financing capacity for investment responses to low reservoir levels this paper addresses this gap and presents a system dynamics model that augments the usual water utility representation of the physical linkages of water grids by adding inter connected feedback loops in tariff structures demand levels and financing capacity the model applied in the south east queensland region in australia enables simulation of alternatives and analysis of stocks and flows around a grid or portfolio of bulk supplies including an increasing proportion of rain independent desalination plants such rain independent water production plants complement the rain dependent sources in the region and can potentially offer indefinite water security at a price the study also shows how an alternative temporary drought pricing regime not only defers costly bulk supply infrastructure but actually generates greater price stability than traditional pricing approaches the model has implications for water supply planners seeking to pro actively plan justify and finance portfolios of rain dependent and rain independent bulk water supply infrastructure interestingly the modelling showed that a temporary drought pricing regime not only lowers the frequency and severity of water insecurity events but also reduces the long run marginal cost of water supply for the region when compared to traditional reactive planning approaches that focus on restrictions to affect demand in scarcity periods

the economics of airport congestion pricing abstract conventional economic wisdom suggests that congestion pricing would be an appropriate response to cope with the growing congestion levels currently experienced at many airports several characteristics of aviation markets however may make naive congestion prices equal to the value of marginal travel delays a non optimal response this paper develops a model of airport pricing that captures a number of these features the model in particular reflects that 1 airlines typically have market power and are engaged in oligopolistic competition at different sub markets 2 part of external travel delays that aircraft impose are internal to an operator and hence should not be accounted for in congestion tolls and 3 different airports in an international network will typically not be regulated by the same authority we present an analytical treatment for a simple two node network and some numerical results to illustrate our findings some main conclusions are that second best optimal tolls are typically lower than what would be suggested by congestion costs alone and may even be negative and that cooperation between regulators need not be stable but that non cooperation may lead to welfare losses also when compared to a no tolling situation

water demand under alternative price structures we estimate the price elasticity of water demand with household level data structurally modeling the piecewise linear budget constraints imposed by increasing block pricing we develop a mathematical expression for the unconditional price elasticity of demand under increasing block prices and compare conditional and unconditional elasticities analytically and empirically we test the hypothesis that price elasticity may depend on price structure beyond technical differences in elasticity concepts due to the possibility of endogenous utility price structure choice observed differences in elasticity across price structures may be due either to a behavioral response to price structure or to underlying heterogeneity among water utility service areas

demand side technology standards under inefficient pricing regimes when price setting regulators haveobjectives other than maximizing socialsurplus the conservation potential ofdemand side technology standards can besignificantly diminished this paperdemonstrates this by empirically recovering thesocially sub optimal preferences of a group ofwater managers in a groundwater dependentregion of california and simulating theirinefficient price response to the mandatedadoption of low flow appliances by homeowners the resulting reduction in the conservationpotential of these appliances is quantified and a modest tax is shown to be a relativelycost effective policy tool for conservation if non price conservation policies arepreferred according to equity criteria thepaper suggests that in order to preserve theirconservation potential policy makers should berequired to continue to set prices as if notechnology standards had been introduced

has inventory management in the us become more efficient and flexible a macroeconomic perspective abstract this paper examines the seeming eradication of evidence for improved inventory management since the early 1980s suggested by the aggregate data in the january 1993 revision of the bureau of economic analysis inventory and sales estimates for us manufacturing and trade it analyzes inventory sales output orders ratios at the published level of detail to determine whether at least some components continue to show clear evidence of increased long run efficiency after 1982 further it investigates three other potential avenues of improved inventory management greater cyclical flexibility adjusting of inventory levels more fully to cyclical peaks and troughs faster adjustment to near term desired levels and diminished buffer stock behavior for each aspect and each inventory component several indicators are examined jointly to assess the evidence for improved management the incidence of positive assessments is then viewed across components to judge their overall role substantial evidence for improved long run efficiency is largely confined to materials and work in process inventories in certain manufacturing industries rising inventory sales ratios for other components centered in retail trade are offsetting elements significantly greater cyclical flexibility and faster speeds of adjustment are more widespread although again centered in manufacturing there is virtually no evidence of diminished buffer stock behavior

price and income elasticities of residential water demand a meta analysis this article presents a meta analysis of variations in price and income elasticities of residential water demand meta analysis constitutes an adequate tool to synthesize research results by means of an analysis of the variation in empirical estimates reported in the literature we link the variation in estimated elasticities to differences in theoretical microeconomic choice approaches differences in spatial and temporal dynamics as well as differences in research design of the underlying studies the occurrence of increasing or decreasing block rate systems turns out to be important with respect to price elasticities the use of the discrete continuous choice approach is relevant in explaining observed differences

household responses to increased water rates during the california drought this paper explores the use of fixed effects and maximum likelihood techniques to es timate household responses to water price in creases during the california drought estimates are based on bimonthly meter readings from 599 single family households in the alameda county water district over the period 1982 1992 before and after the introduction of a steeply increasing block rate price structure i find that household and monthly fixed effects models are not success ful in modeling water demand with these data however maximum likelihood models that ex plicitly consider the household s response to the rate structure result in plausible estimates of wa ter demand jel q25

measuring the income elasticity of water demand the importance of publication and endogeneity biases we present the first study that examines the effects of publication selection in the literature estimating the income elasticity of water demand paradoxically more affected by publication selection are the otherwise preferable estimates that control for endogeneity attempting to correct simultaneously for publication and endogeneity biases we find that the mean underlying elasticity is approximately 0 15 or less the result is robust to controlling for more than 30 characteristics of the estimates and accounting for model uncertainty the differences in the reported estimates are systematically driven by differences in the tariff structure regional coverage data granularity and control for temperature

are price strategies effective in managing demand of high residential water users abstractencouraging water use efficiency and water conservation is one of the primary goals of water utility companies nationwide this study estimates price elasticity of residential water demand to measure the responsiveness of water use to price changes particularly for high water users household level water use data for high residential water users from central florida were analysed using 3 stage least square 3sls estimated price elasticity ranges between 0 07 and 0 14 this price elasticity estimate is below most of the estimates reported in the literature in absolute value the results imply that for price strategies to be effective in managing water demand of high residential water users a significant price increase would be needed overall this study highlights the importance of designing water conservation policies tailored to specific groups of customers and the importance of using these strategies effectively and fairly for different customer groups

price uncertainty and consumer search a structural model of consideration set formation we offer an econometric framework that models consumer s consideration set formation as an outcome of her costly information search behavior because frequently purchased products are characterized by frequent price promotions of varying depths of discounts a consumer faces significant uncertainty about the prices of the brands the consumers engage in a fixed sample search strategy that results in their discovering the posted prices of a subset of the available brands this subset is referred to as the consumer s consideration set the proposed model is estimated using the scanner data set for liquid detergents our key empirical results are i consumers zincur significant search costs to discover the posted prices of the brands ii whereas in store displays and feature ads do not influence consumers quality perceptions of the brands they significantly reduce search costs for observing the prices of the brands iii per capita income of consumer s household significantly increases her search costs and iv the consumers price sensitivity is seriously underestimated if we were to assume that consumers get to know all the posted prices at zero cost the proposed model is also estimated for the ketchup category to enable us to do cross category comparisons of consumers price search behavior

welfare implications of water scarcity higher prices of desalination in this paper we evaluate the welfare implications of shortages in renewable resources and investigate the effects of cross subsidization on these shortages we set up a stochastic dynamic programming model in which a benevolent supplier allocates the resource for multiple user groups subject to revenue and resource constraints the supplier also has access to an external source that can be utilized at a certain cost the solution to the model gives the optimal sectoral prices and demand for the external source we find out that saving budget surplus during periods of scarcity allows the planner to charge prices below average costs when the resource is abundant using data from turkey we simulate our dynamic model to quantify the implications of cross subsidization on water use across user groups

tradeable permits for pollution control when emission location matters what have we learned our knowledge about tradeable permit approaches to pollution control has grown rapidly in the two decades in which they have received serious analytical attention not only have the theoretical models become more focused and the empirical work more detailed but we have now had over a decade of experience with them in the u s this article draws upon economic theory empirical studies and actual experience with implementation to summarize what we have learned about applying tradeable permits to air pollution control in the special circumstance where the spatial aspects of the problem are a prime consideration

information provision and consumer behavior a natural experiment in billing frequency abstract in this study i estimate a causal effect of increased billing frequency on consumer behavior i exploit a natural experiment in which residential water customers switched exogenously from bimonthly to monthly billing customers increase consumption by 3 5 5 in response to more frequent information this result is reconciled in models of price and quantity uncertainty where increases in billing frequency reduce the distortion in consumer perceptions using treatment effects as sufficient statistics i calculate consumer welfare gains equivalent to 0 5 1 of annual water expenditures heterogeneous treatment effects suggest increases in outdoor water use

inventory allocation and customer travelling problem in spatial duopoly abstract the paper is a theoretical study about connecting inventory allocation and market area for the goods defined by customers travelling decisions influenced by the expected shortages of goods in the paper inventories in spatial models bogataj international journal of production economics 45 1996 337 342 2 we have emphasized the need for connecting inventory and location analysis this problem was studied further by h j girlich in his paper on the metric transportation problems and their solution girlich lecture notes of the international postgraduate summer school vol 2 1995 pp 13 24 which gives us proper foundations for our present research the study is influenced by grubbstrom and molinder s work on mrp optimization for details see grubbstrom management science 13 7 1967 558 567 grubbstrom the mathematical scientist 16 1991 118 129 grubbstrom international journal of production economics forthcoming grubbstrom international encyclopaedia of business and management 1996 grubbstrom and molinder proceedings of the eight international working seminar on production economics 1994 grubbstrom and molinder international journal of production economics 35 1994 299 31 6 11 the annuity stream approach has been applied in the environment of spatial duopoly where the optimal ordering policy depends on the interaction between the prices and shortages of goods in the studied duopolies customer travelling problem ctp is defined which determines the market area for allocated inventories

the welfare gains from pricing road congestion using automatic vehicle identification and on vehicle meters it is a widely accepted proposition that there is a general underpricing of auto travel in u s cities auto travel imposes a congestion externality with an efficient peak period level estimated at lo 23t per mile on urban freeways small 1121 2 3 but for most urban auto travel tolls consist almost entirely of the gasoline excise tax at a fuel economy of 15 miles per gallon the auto toll implied by the current high gas tax in the united states of 25e per gallon is only 1 7e per mile this is much too low for most peak period travel and even underprices some off peak travel the purpose of this study is to estimate the welfare gains which are possible under different regimes for imposing higher auto tolls in urban areas the three regimes studied are associated with a higher gas tax and systems called automatic vehicle identification and on vehicle metering the framework for the study is a model of a city whose shape is that of a wedge or pie slice of a circle the model s features include

the elasticity of taxable income evidence and implications abstract a central tax policy parameter that has recently received much attention but about which there is substantial uncertainty is the overall elasticity of taxable income we provide new estimates of this elasticity which address identification problems with previous work by exploiting a long panel of tax returns to study a series of tax reforms throughout the 1980s this identification strategy also allows us to provide new evidence on both the income effects of tax changes on taxable income and on variation in the elasticity of taxable income by income group we find that the overall elasticity of taxable income is approximately 0 4 the elasticity of real income not including tax preferences is much lower we estimate small income effects of tax changes on reported income implying that the compensated and uncompensated elasticities of taxable income are very similar we estimate that this overall elasticity is primarily due to a very elastic response of taxable income for taxpayers who have incomes above 100 000 per year who have an elasticity of 0 57 while for those with incomes below 100 000 per year the elasticity is less than one third as large moreover high income taxpayers who itemize are particularly responsive to taxation our estimates suggest that optimal tax structures may feature tightly targeted transfers to lower income taxpayers and a flat or even declining marginal rate structure for middle and high income taxpayers

responsiveness to energy price changes when salience is high residential natural gas demand in ukraine abstract despite its importance for policy purposes evidence about the price elasticity of natural gas demand in the residential sector is very limited and based on inference from situations with modest variation in prices we focus on a locale and time when price changes were extreme and salient to consumers namely ukraine between 2013 and 2017 we exploit the tariff reforms and detailed micro level household consumption records to assess whether consumers adjust their consumption in response to the rate changes and estimate the price elasticity of the demand for natural gas to isolate behavior attention is restricted to those households that made no structural energy efficiency upgrades to their homes thus keeping the stock of gas using capital fixed we find that households are capable of reducing consumption even without installing insulation or making any other structural modifications to their homes the price elasticity is about 0 16 wealthier households people living in multifamily buildings and heavy users have more inelastic demands households reduced consumption even when they received government assistance this and the fact the demand is inelastic especially for wealthier households bode well for tariffs or energy tax schemes where wealthier households subsidize the consumption of the poorer ones

testing the behavior of rationally inattentive consumers in a residential water market abstract rationally inattentive consumers tend to apply simplified heuristics when making decisions we test the hypothesis of rational inattention in the context of residential water usage where water bills typically account for a small fraction of household expenditures and only attract casual attention we begin by rigorously testing whether or not residential water customers exhibit evidence of rational inattention we then propose a heuristic water demand model to explore the decision making of rationally inattentive consumers and validate the model by comparing the model with the discrete continuous choice model on attentive and fully informed decision makers in out of sample predictions