an analysis of interfirm cooperation theory and evidence from electric power pools this paper develops and tests a model for analyzing the extent to which an individual utility participates in a power pool it incorporates the benefits and costs of pool membership in a profit maximization model of an individual utility the study finds that coordination reflects the benefits and costs the degree to which other utilities are committed to the pool and the utility s behavior toward other utilities the results show that large firms are reluctant to pool with small firms and the us pools tend to be loosely coordinated policy implications are that regulatory commissions can be instrumental in coordination efforts and that interstate cooperation among regulatory authorities is needed to encourage pooling and obtain regional solutions to regional problems it is also important to reduce the transactional costs of pooling wherever possible 37 references 3 figures 1 table

measuring returns to scale in dea models when the firm is regulated in the standard framework of data envelopment analysis dea models the returns to scale are fully characterized using the multiplier on the convexity constraint of inefficient decision making units dmu using the projection of the input output vector on the frontier in this note we investigate how the returns to scale measurements in dea models are affected by the presence of regulatory constraints these additional constraints change the role played by the convexity constraint in order to avoid biased estimation of the returns to scale we show that the interaction between the regulatory and the convexity constraints has to be taken into account

shared inputs over capitalization and regulation abstract when inputs are joint in production a partially regulated firm has the incentive to allocate all joint inputs to the regulated jurisdiction the regulated firm if required to allocate costs will have less of an incentive to over capitalize

the impact of regulation on technical change input based regulation restricts a firm s input choices to a subset of those that characterize the production technology the averch johnson hereafter a j 1962 hypothesis states that rate of return regulation affects a firm s input demands for producing its selected output level given that firms can select the level of innovations in inputs through research and development rate regulation can also impact a firm s selection of innovations among inputs regulation s influence on the choice of innovations also impacts the rate at which technical change occurs in an industry the a j hypothesis has been examined extensively in the literature the impact of regulation on technical change has received less attention in the literature and is the focus of this paper the subject matter is of some importance in that regulation via the a j hypothesis leads to higher production costs regulation s impact on a firm s selection of innovations can magnify or dampen the rate at which technical change occurs a magnification dampening of the rate of technical change leads to lower higher production costs in addition to regulation s impact on input demands regulation s impact on the rate of technical change can lead to small or large changes in prices for consumers regulators can use the information on regulation and technical change to evaluate the effectiveness of policies aimed at enhancing technical change by how much do the policies affect production costs and how much would consumer prices change due to the policies regulators can also use the information to predict the impact deregulation would have on consumer prices both regulators and consumers can attempt to determine the amount by which consumer prices would change under deregulation smith 1974 and okuguchi 1975 examined the impact of regulation on a firm s choice of innovations they showed theoretically that regulation can alter a firm s choice of innovations

discussion of incentives for accruing costs and efficiency in regulated monopolies subject to roe constraint the paper incentives for accruing costs and efficiency in regulated monopolies subject to roe constraint investigates the implicit contracts that are used to compensate executives in the electric utility industry the conference discussion of this paper centered on the economics underlying the contracting issues investigated as well as the research design and econometric approach discussion related to the underlying economics is organized below under the following topics 1 the economics of electric utility regulation which determines the nature of the contract between the regulators and the firm and 2 the structure of compensation schemes in the electric utility industry i e the nature of the implicit contract between shareholders and managers of electric utilities questions raised about the research design and econometric approach are subdivided as follows 3 design questions including potential problems with the time period selected and the paper s crosssectional approach 4 operational definitions of constructs used e g measures of efficiency and 5 econometric issues especially those related to the estimation of cost versus production functions

effects of regulation and capital market imperfections on the dynamic behavior of a firm the well known result in the theory of a regulated firm known as the averch johnson effect is that a profit maximizing firm subject to rate of return regulation uses an inefficiently high capital labor ratio to produce its chosen level of output numerous contributions in the literature have been instrumental in clarifying the implications and generalizing the model 1 these contributions however have been mostly couched within a static framework few attempts have been made to investigate the effect of rate of return regulation on the dynamic behavior of the firm in particular its investment plans 2 neoclassical models of investment often assume that the rate of investment under

the household response to persistent natural disasters evidence from bangladesh we examine the short run economic impacts of recurrent flooding on bangladeshi households surveyed in 2000 2005 and 2010 in 2010 household income and expenditure survey hies households answered a set of questions on whether they were affected by flood and its likely impacts we identify two treatment affected groups by using the self reported data and historical rainfall data based flood risk index we estimate a difference indifference did model to quantify the impacts on income expenditure asset and labour market outcomes and further extend our analysis to different income and expenditure brackets overall we find robust evidence of negative impacts on agricultural income and expenditure intriguingly the extreme poor i e the bottom 15th quintile experience significant positive impacts on agricultural income in the self reported treatment case

the impact of natural disaster on energy consumption international evidence abstract this research shows that natural disasters may hurt energy consumption by using data on 123 countries over the period 1990 2015 and classifying them according to their economic development level and region based on world development indicators we employ a two step system gmm method to examine the effect of natural disasters on energy consumption presenting findings that support our hypotheses in the models and show a strong negative effect for low income countries or those in the africa region after considering an alternative proxy for natural disaster we implement quantile regression methods their results find that natural disasters exhibit a negative and significant impact on oil renewable and nuclear energy consumptions the quantile regression models used in the robustness check present that the effects are stronger for low level energy consumption economies

alternative regulatory methods and firm efficiency stochastic frontier evidence from the u s electricity industry the use of incentive regulation and other alternative regulatory programs in u s electricity markets has grown during the past two decades within a stochastic frontier framework i investigate the effect of individual programs on the technical efficiency of a large set of coal and natural gas generation units i find that those programs tied directly to generator performance and those that modify traditional fuel cost pass through programs to provide a greater incentive to reduce fuel costs are associated with greater efficiency levels other programs have no statistical association with efficiency levels

declining nutrient intake in a growing china does household heterogeneity matter summary this paper uses chinese household data for 1989 2009 to explain why mean nutrient intake has declined despite economic growth we focus on household heterogeneity in nutrient intake response to increases in household income allowing for its endogeneity a quantile instrumental variable fixed effects panel estimation shows that rising income tends to reduce inequality in macronutrient intake in both urban and rural areas in 2004 09 this is driven by increases in nutrient intake for the urban nutrient poor and falls in nutrient intake for the rural nutrient non poor on the other hand fluctuations in prices of meat eggs and oil increase nutrition poverty

natural disasters and university enrolment evidence from l aquila earthquake although there are several studies looking at the effect of natural disasters on economic growth less attention has been dedicated to their impact on educational outcomes especially in more developed countries we use the synthetic control method to examine how the l aquila earthquake affected subsequent enrolment at the local university this issue has wide economic implications as the university of l aquila made a large contribution to the local economy before the earthquake our results indicate that the earthquake had no statistically significant effect on first year enrolment at the university of l aquila in the three academic years after the disaster this natural disaster however caused a compositional change in the first year student population with a substantial increase in the number of students aged 21 or above this is likely to have been driven by post disaster measures adopted in order to mitigate the expected negative effects on enrolment triggered by the earthquake

capacity utilization and new source bias evidence from the us electric power industry abstract while prior research has shown that new source bias has increased construction costs and delayed the building of new electric power plants this research explores the empirical question of whether increased operating costs caused by new source bias are larger than the cost savings of newer technology if new sources do have higher operating costs an incentive exists to utilize order plants more intensively statistical evidence of these differing utilization rates is found

dynamic efficiency estimation the shadow cost approach is developed in the context of the dynamic duality model of intertemporal decision making to formulate theoretical and econometric models of dynamic efficiency the dynamic efficiency model is applied to a panel of 72 u s major investor owned electric utilities using fossil fuel fired steam electric power generation over the period 1986 1999 the major results show that most electric utilities underutilized fuel relative to the aggregated labor and the maintenance input and overutilized capital in production states adopting a deregulation plan improve the performance of utilities in terms of the technical efficiency of variable inputs

what can we learn from the grand policy experiment lessons from so2 allowance trading stable url http links jstor org sici sici 0895 3309 28199822 2912 3a3 3c69 3awcwlft 3e2 0 co 3b2 tthe journal of economic perspectives is currently published by american economic association your use of the jstor archive indicates your acceptance of jstor s terms and conditions of use available athttp www jstor org about terms html jstor s terms and conditions of use provides in part that unless you have obtainedprior permission you may not download an entire issue of a journal or multiple copies of articles and you may use content inthe jstor archive only for your personal non commercial use please contact the publisher regarding any further use of this work publisher contact information may be obtained athttp www jstor org journals aea html each copy of any part of a jstor transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission the jstor archive is a trusted digital repository providing for long term preservation and access to leading academicjournals and scholarly literature from around the world the archive is supported by libraries scholarly societies publishers and foundations it is an initiative of jstor a not for profit organization with a mission to help the scholarly community takeadvantage of advances in technology for more information regarding jstor please contact support jstor org http www jstor orgtue jun 26 16 25 17 2007

optimizing inventory s contribution to profitability in a regulated utility the averch johnson effect the averch johnson effect is a well known economic phenomenon through which regulated utility companies prefer a capital resource input combination that differs from an efficient level through dynamic network data envelopment analysis ndea this paper first investigates the existence of this effect on a dynamic input that is inventory the analysis was performed for a group of public electric utilities from 2005 to 2014 the result implies that these firms procure a significant extra amount in inventory materials and supplies beyond their efficient levels in order to explore the connection of this effect to profit motives we construct an analytical model of the inventory policy controlling the extra buying of material and supplies that will be inventoried and added to the firm s rate base the model is based on maximizing the net present value of total profits in the deterministic case two results are observed i the firm could achieve a finite optimum by adding a finite amount of inventory above the normal base level which assumes no impact of inventory on the rate hearing and ii the firm could theoretically achieve infinite optimum under the unconstrained model the primary contribution of this paper is the special case of extending typical inventory replenishment models to including the impact on prices and in turn profits in a regulated supply chain

some simple analytics of peak load pricing author s bergstrom ted mackie mason jeffrey k abstract consider a public utility that offers its service at two different times we study the effects of a change from uniform pricing throughout the day to peak load pricing we show that for a utility constrained to operate with a fixed rate of return on capital the introduction of peak load pricing can plausibly reduce the price of the service it both in peak and off peak times we also find that peak load pricing can lead to either greater or smaller capacity than uniform pricing we find a simple criterion for determining whether a particular individual gains or loses from peak load pricing

market based systems for reducing chemical use in agriculture in the united states this study uses a computable general equilibrium cge model of the u s economy to estimate the economic effects of agricultural fertilizer and pesticide input reductions on individual farm sectors and on the economy as a whole the costs of reducing agricultural chemicals using a market based approach and a command and control approach are compared the real cost to society of restrictng fertilizer and pesticide use by 20 percent across all uses is estimated to be 2 3 billion a market based approach that would provide incentives to reduce chemical use in the most cost efficient manner would be about 10 percent less costly

elasticities of substitution for a regulated cost function abstract this paper proposes a modification to the uzawa 1962 characterization of the allen partial elasticity of substitution under cost minimization to take account of the behavioral properties of the cost function for a firm subject to rate of return regulation

shirking and the choice of technology a theory of production inefficiency with an empirical application abstract we develop a model of shirking and technology choice and show that organizations exercising less effective direct control over shirking adopt technologies that underutilize the workforce to a greater degree relative to neoclassical counterparts in order to control shirking indirectly thus technical inefficiency arises endogenously as a rational response to allocative inefficiency caused by shirking an empirical analysis of data from a sample of collective and private farms operating in jewish palestine reveals the presence of shirking and supports the prediction that farms with less effective direct control over shirking exhibit greater labor hoarding as a manifestation of technical inefficiency

x inefficiency and interfirm rivalry evidence from the electric utility industry competition from the natural gas industry is shown to increase the efficiency of the work force of electric power utilities this conclusion is qualified to the extent that duopoly rivalry does not represent perfect competition in a free market as natural gas reserves decline however the impetus to improve efficiency will diminish but this will be offset by technological advances in both power generation and power transmission if regulators develop policies to encourage competitive interplay utility performance is more likely to improve 38 references 3 tables dck

a dual measure of economies of scope a derivative based measure of economies of scope is obtained by exploiting the duality between the shadow cost function and the input distance function this is a useful measure when the econometric estimation of a cost function is not viable

externalities in a regulated industry the aircraft noise problem airline noise is an externality in the traditional sense of being a byproduct of normal economic activity it affects the population around airports in single event bundles and cumulatively the transient nature of noise itself is unlike most other externalities as with the others however general improvements in technology and increases in population have made the situation more difficult to tolerate the combination of these things has led to a critical situation for the affected population since it involves its physical and mental health from among the various methods of dealing with externalities we choose the effluent charge scheme it generally allows each firm to incorporate the environmental standard into its marginal operating choices if each firm makes efficient decisions then the cost to society of achieving an environmental standard will be a minimum in this paper there are two modifications of the traditional charge scheme one is that because of the well known difficulties in specifying and estimating social costs we use the estimated direct noise abatement costs of achieving the environmental standard the second is that airlines cannot be necessarily thought of as cost minimizers the charges used for the control of airline noise are generated as shadow prices in a simple linear programming model solution to the problem involves choosing a mix of noise abating options that achieves proposed environmental standards at least cost additional bounds on the problem are limitations on service reductions and rate of return ror oni investment regulation the data sources used for the program were generally fragmentary and incomplete for our purposes after calculating a noise charge for a hypothetical airport we discuss the implementation and ramifications of the charge plan in the regulated airline industry included is a discussion of the link between noise abatement and fuel consumption

systematic departures from the frontier a framework for the analysis of firm inefficiency departures from a production or cost frontier may reflect the systematic effect of conditions that contribute to inefficiency to test whether some portion of frontier function departures can be systematically explained the frontier inefficiency error component is modeled as a function of various causal factors and a random component the functional form of the inefficiency error term model is chosen to assure strict one sidedness preliminary empirical results generated from electric utility data suggest the superiority of including both systematic and random components in the inefficiency error term

dynamic behavior of the firm with adjustment costs under regulatory constraint abstract this paper investigates the optimal investment behavior of the regulated profit maximizing firm in a dynamic context the modern adjustment cost approach to investment is incorporated into the theory of a regulated firm which has typically been discussed in a static framework this paper thus generalizes the well known averch johnson thesis which is proved in the static context the paper investigates both the finite and infinite horizon cases

effects of regulation on utility financing theory and evidence standing of these cross sectional variations might be afforded by the detailed examination of specific industry characteristics and their relationship to firms financing patterns the present study offers a methodology for approaching this issue the first step is to assemble joint theories of industry and financial structure in order to identify the ways in which changing industry conditions might be associated with changes in financing evidence on such simultaneous changes can then be examined in an attempt to identify the most plausible joint theory the methodology is used to investigate the effects of state commission regulation on the financing of electric utilities this is a natural candidate for study since regulation is such a salient feature of the industry in addition the regulatory system imparts some interesting special features to the very nature of utility capital structures inherent in all capital structures for example are opportunities for shifting wealth between bondholders and shareholders but under regulation these wealth shifting opportunities are expanded to encompass consumers as well finally the study of regulation has resulted in several relatively well specified theories of why regulation is imposed and what its observable effects should be in section i the different theories of capital structure and regulation are discussed and their joint implications are derived the capital structure theories include the perfect capital market theory the debt capacity theory and the financing hierarchy theory the regulatory theories include the public interest or market failure theory the political economy theory and the imperfect monitoring theory in section ii financing data from the early days of state commission utility regulation are used to try to distinguish

regulation of administered prices an empirical analysis of the microeconomics of price movement in finland 1972 77 curiously enough the concept of administered prices launched by gardiner means in his 1934 report to the u s secretary of agriculture still shows up in discussions on price policy and control today almost fifty years since it was coined and three decades after the discussion2 in which it should have been buried even more astonishing is the fact that its spin off administered inflation a term introduced by the kefauver committee in 1957 3 is still a part of economic language in some instances in the basic formulation that of means in 1935 administered prices are not assumed to be explicitly linked with market power but simply prices set by administrative action and held constant for a period of time means 12 p 78 although the hypothesis in this form was based on no economic reasoning of acceptable clarity it might still be accepted for the simple truism it is clearly some prices will change more seldom than others since for one thing costs of price changes will vary as is intuitively clear and as shown by sheshinski and weiss 17 pp 294 95 the optimal strategy of a firm in an inflationary environment will consist of longer intervals between successive price changes the higher the cost of such a change is under some very special assumptions risk aversion may also serve as an explanation to a decrease in the number of price changes relative to the number of changes in cost as indicated by the results of schramm and sherman 1 5 4 the administered inflation hypothesis as forwarded by means in his 1957 testimony before the kefauver committee means 12 pp 101 29 and by

behavior of the firm under regulatory constraint a recent article by akira takayama discusses an earlier paper by harvey averch and leland l johnson on fair rate of return regulation of public utilities although takayama p 255 agrees with averch and johnson s general conclusions that a firm will tend to increase its investment with the introduction of an active constraint on its rate of return he criticizes the a j argument as being confusing ambiguous and in error takayama then attempts a clarification and presents a new formulation which leads to the a j result quoted above this comment will discuss several of takayama s criticisms in addition to showing that the so called a j effect cannot be derived from the basic assumptions made by both averch and johnson and takayama 1 we will show that the very assumptions used to prove the a j effect by defining the region of x require an assumption that the a j effect exists in the first place

regional electric power demand elasticities of japan s industrial and commercial sectors abstract in the assessment and review of regulatory reforms in the electric power market price elasticity is one of the most important parameters that characterize the market however price elasticity has seldom been estimated in japan instead it has been assumed to be as small as 0 1 or 0 without proper examination of the empirical validity of such a priori assumptions we estimated the regional power demand functions for nine regions in order to quantify the elasticity and found the short run price elasticity to be 0 09 0 30 and the long run price elasticity to be 0 12 0 56 inter regional comparison of our estimation results suggests that price elasticity in rural regions is larger than that in urban regions popular assumptions of small elasticity of 0 1 for example could be suitable for examining japan s aggregate power demand but not power demand functions that focus on respective regions furthermore assumptions about smaller elasticity values such as 0 01 and 0 could not be supported statistically by this study

the influence of the economic approaches to regulation on banking regulations a short history of banking regulations this article highlights the theoretical foundations of the regulations at work in the banking sector and examines their responsibility in the onset of the 2007 2008 financial crisis drawing a parallel between the main changes in banking regulations since the 1960s and the evolutions in the economic analyses of regulation over the same period it shows that the shift from the public interest theory of regulation that prevailed until the late 1960s towards the private interest theory of regulation accounts for the substitution of micro prudential regulations for macro prudential ones and explains a paradigmatic change in the conception of the regulatory instruments of the banking authorities it also shows that although the outcome of several factors the 2007 2008 crisis was also a consequence of the fact that the economic analysis of banking regulations supported micro prudential regulations that fail to take the global features and impact of banking activities into account and have proved unable to recommend effective solutions in a context of crisis

estimated elasticities from regulated and unregulated cost functions abstract estimates of the allen partial elasticities of substitution aes for a regulated cost function smith 1981 are compared with those obtained from an unregulated cost function the aes for capital and variable inputs are reasonably similar but those between variable inputs differ significantly

emissions trading electricity restructuring and investment in pollution abatement this paper analyzes an emissions trading program that was introduced to reduce smog causing pollution from large stationary sources using variation in state level electricity industry restructuring activity i identify the effect of economic regulation on pollution permit market outcomes there are two main findings first deregulated plants in restructured electricity markets were less likely to adopt more capital intensive environmental compliance options as compared to regulated or publicly owned plants second as a consequence of heterogeneity in electricity market regulations a larger share of the permitted pollution is being emitted in states where air quality problems tend to be more severe jel l51 l94 l98 q53 q58 when the us federal government first began regulating major sources of air pollution in the 1960s the conventional approach to meeting air quality standards involved establishing maxi mum emissions rates or technology based standards for regulated stationary sources however economists have long maintained that an emissions permit market could more efficiently coor dinate pollution abatement activities provided a series of assumptions are met over the past few decades market based cap and trade cat approaches to regulating emissions from industrial point sources have become a centerpiece of environmental regulation in the united states in the theoretical first best permit market equilibrium the total social cost of meeting an emis sions cap is minimized each firm chooses a level of pollution abatement such that its marginal cost of reducing pollution is set equal to the social marginal benefit from emissions reduction in practice preexisting distortions in product markets that are subject to cat regulation may interfere with the emissions permit market s ability to operate efficiently this paper studies the effects of electricity market regulation on permit market outcomes in the context of a major us emissions trading program the nox budget program the recent wave of electricity industry restructuring in the united states has resulted in significant interstate variation in economic regulation consequently facilities in the same cat program face very different economic regu lation and investment incentives in their respective electricity markets whereas rate base regu lated plants are guaranteed to earn a rate of return on prudent investments in pollution abatement equipment deregulated plants operating in restructured electricity markets are offered no such

regulation and investment use newly assembled data on regulation in several sectors of many oecd countries to provide evidence that regulatory reform of product markets is associated with an increase in investment a component of reform that plays a very important role is entry liberalization but privatization also has a substantial effect on investment sensitivity analysis suggests that our results are robust jel e22 l5

efficiency based rank assessment for electric power industry a combined use of data envelopment analysis dea and dea discriminant analysis da abstract this study discusses a combined use of dea data environment analysis and dea da discriminant analysis to determine the efficiency based rank of energy firms this type of performance evaluation is important because we often have a difficulty in accessing a large sample on energy firms to derive reliable empirical results the proposed approach is useful in dealing with such a limited number of energy firms often found in previous dea studies on energy industries in the world the proposed approach uses dea to classify energy firms into efficient and inefficient groups based upon their efficiency scores then it utilizes dea da to assess their efficiency scores and ranks in this stage we can find an adjusted efficiency score for each energy firm the proposed approach provides us with the following analytical capabilities all of which cannot be found in a conventional use of dea in assessing energy firms first the proposed dea approach can avoid zero in all multipliers on efficient energy firms by incorporating scsc strong complementary slackness condition so that it can handle an occurrence of multiple reference sets and multiple projections the dea result classifies all energy firms into efficient and inefficient groups second dea da applied to the two groups evaluates all energy firms by an industry wide evaluation not depending upon a limited number of efficient energy firms in a reference set as found in a conventional use of dea the analytical capability can reduce the number of efficient energy firms third the proposed approach can provide their efficiency based ranking scores finally we can conduct a rank sum test based upon their ranking scores to obtain a statistical inference as an application this study uses the proposed approach to examine the performance of japanese electric power industry we find two economic implications one of the two implications is that no major change has occurred in the operational performance of japanese electric power industry because of japanese sluggish economy from 2005 to 2009 the other implication indicates that there are strategic differences in the operation of japanese electric power firms after the liberalization

capital vintage time trends and technical change in the electric power industry beginning with tinbergen in 1942 economists have employed a time trend in cost or production functions to represent the rate at which new technology is introduced into the production unit in sufficiently flexible models of the production process the time trend may be used to obtain estimates of the rate as well as direction of technical change the use of the time trend is generally defended on pragmatic grounds as no theoretical justification exists for assuming that new technology is introduced at a steady rate that is independent of a firm s investment in r d education capital of a more recent vintage etc in recent years alternatives to the traditional time trend have been sought to represent the rate at which new technology is introduced research in this area has been concentrated in the telecommunications industry where the stock of r d or the percentage of calls completed by direct dialing or modern switching facilities have been employed as technological indices by nadiri and schankerman 32 denny et al 14 and christensen et al 7 the latter two studies indicate that explicit technological indices provide a better representation of the pace of innovation than the time trend this conclusion must remain tentative however as it is not possible to determine what is the true direction of technical change in these studies this shortcoming is overcome in a recent study by kopp and smith 24 who compare the performance of time trends and explicit technological indices in a study using pseudo data generated by process analysis models their results unambiguously support the use of technologically explicit indicators of technical change and indicate that the use of a time trend may not provide a consistent estimate of the direction of technical change this study does not however shed any light on the ability of a time trend to accurately reflect the rate of technical change the purpose of this study is to investigate the effects of alternative technological indices on the estimated rate and direction of technical change in the electric power industry the performance of a time trend is compared with that of a vintage index computed as the average age of a firm s steam generating capacity this latter index is consistent with the notion that new technology is embodied in newly constructed capital an assumption sup

the impact of natural disasters on household income expenditure poverty and inequality evidence from vietnam natural disasters are expected exacerbate poverty and inequality but little evidence exists to support the impact at household level this article examines the effect of natural disasters on household income expenditure poverty and inequality using the vietnam household living standard survey in 2008 the effects of a natural disaster on household income and expenditure corrected for fixed effects and potential endogeneity bias are estimated at 6 9 and 7 1 declines in vietnamese household per capita income and expenditure respectively natural disasters demonstrably worsen expenditure poverty and inequality in vietnam and thus should be considered as a factor in designing poverty alleviation policies

cost efficiency of electric grid utilities in china a comparison of estimates from sfa mle sfa bayes and stoned cnls with the purpose of estimating the range of cost efficiency levels of the power grid sector in china we assembled a data set including 23 provincial power grid companies spanning from 2005 to 2009 and conducted an empirical study based on the sfa mle sfa bayes and stoned cnls methodologies empirical results show that the average values of efficiency from different models vary from 0 85 to 0 92 depending especially on the assumptions underlying inefficiency content further results demonstrate that there is exogenous technical progress during the sample period and per capita gdp of the province is negatively related to the costs of the electric grid company located in the corresponding province we hope this empirical study will contribute to the debate on an efficiency based regulation scheme which was introduced to the chinese electric grid sector on a pilot base in 2014

service quality in the electricity industry the role of privatization and managerial behavior abstract this paper analyzes the relationship between privatization and service quality in the electricity industry and tests the hypothesis that managerial behavior is a significant intervening factor the sample includes 31 italian distributors over the period 1998 2004 their quality performance is represented by continuity of supply an aspect of quality that is both contractible and regulated results of the empirical analysis suggest that the transfer of shareholdings to private investors does not lead to quality degradation the results also suggest that managerial dominance translates into a reduction in supply quality this effect is likely to be particularly strong for public sector utilities

limitations in evaluating environmental and agricultural policy coordination benefits agricultural policy has traditionally been concerned with the maintenance and stability of farm income and the provision of a stable food supply at low relative prices the food security act of 1985 was the first farm legislation to directly tie farm income and environmental concerns through the conservation reserve program conservation compliance sodbuster and swampbuster provisions the coordination of conservation and farm income policies contributed to commodity supply control by reducing the availability of arable land and it promoted environmental quality by removing some highly erodible land and wetlands from crop production a number of new environmental and food safety initiatives are also being enacted outside the agricultural policy process the most significant piece of legislation is the water quality act of 1987 designed to control

behavior of the firm under regulatory constraint a recent article in this review by averch and johnson 3 on the fair rate of return regulation in public utilities industries or more generally regulated industries attracted the attention of many economists in essence averch johnson argues that the introduction of an active constraint of a fair rate of return type would induce the firm to invest more than the original profit maximizing value of capital and this would create an inefficient allocation of inputs in addition to frequent citations in verbal arguments it has invited some thieoretical extensions by economists such as wvestfield 8 and klevorick 5 all of the writers seem to accept the basic theoretical foundations set by averch and johnson for example klevorick 5 recently proposed that the fair rate of return should be inversely related to the size of the capital of a firm the intuitive basis for this is apparent for it in effect creates a penalty as the amount of capital used by the firm increases however it seems to me that averchjohnson s original arguments are sketchy and contain somewhat ambiguous logic at several important points although their conclusion for which they tried to find empirical support that a firm will tend to increase its investment with the introduction of an active constraint seems to be correct it does not follow from their arguments in particular there seems to be a serious error which arises from confusing movements along a curve and shifts of a curve in section ii we clarify those ambiguities and if necessary correct the mistakes in the third section of this paper we shall provide a new formulation of the problem we shall find that the new formulation will give the same answer as averchjohnson namely that a firm will tend to invest more with the iiltroductioin of an active constraint it should be noted however that while the conclusion happens to be the same this was not the necessity for we needed a completely new formulation to obtain the old conclusion

the future of market regulation market regulation is accomplished both by competition and by external government agencies and the trend is toward greater reliance on competition economists have fostered this trend and have even invented markets to help overcome some externality problems they have contributed to a steady improvement in antitrust policy which currently reflects economic knowledge well they diagnosed and demonstrated problems with external regulation of the airline industry and gave assurance that regulation by competition could work in its place success there led not only to deregulation of airlines but also deregulation of railroads trucks buses and in some ways natural gas pipelines two other industries telecommunications and electricity are now following very ambitious paths toward less external regulation and greater dependence on competition the internet raises new issues but there also competition will play an important regulatory role

the cost function given imperfectly flexible capital abstract the properties of the firm s cost function are examined when investment is irreversible and there are costs of capital adjustment the effects of the firm s initial capital stock on total marginal and average costs are analysed

uncoordinated agricultural and environmental policy making an application to irrigated agriculture in the west agriculture and the environment are linked by a mutual reliance on scarce resources and prevalent market distortions in this paper we examine the efficiency costs of policies that correct distortions in one sector while ignoring those in another the dual distortions of an environmental externality and water subsidies are studied in the context of irrigated agriculture in california the welfare costs associated with independent action by either a water agency or an environmental authority when that policy maker attempts to correct the respective market distortion without consideration of the distortion in the other market are estimated policies to correct the two distortions are found to be complementary under these conditions the independent correction of either distortion improves welfare by at least 118 per acre in most cases the simultaneous adoption of various second best policies further reduces welfare losses associated with these distortions

factor price changes technical efficiency and revenue requirements regulation a regulatory framework is considered in which output price adjustments can be initiated only by a change in the price of a non capital input e g fuel at some time in the future which is uncertain at that time there is a processing period and then an adjustment of the output price so that the revenues of the firm meet an allowed rate of return s the regulated firm choosing a putty clay technology is shown to overcapitalize for large values of s and to undercapitalize for sufficiently small values of s a decrease in the length of the processing period is found to accentuate the extent of either the undercapitalization or overcapitalization resulting from the specified rate of return

distorting the direction of technological change abstract this article explores a monopolist s incentive to distort the direction of technological change for strategic reasons the monopolist might invent and employ a socially undesirable technology in so doing he might jeopardize not only the vigor of product market competition but also the development of socially desirable methods of production as a result technological dynamism cannot be considered a social virtue until its direction is compared with the social optimum

power pooling an exercise in industrial coordination interconnected public utilities can achieve cost savings more reliable service lower capacity requirements and optimum siting by closely coordinating generation and transmission transactions within a common pool they can also achieve seasonal diversity and economy of energy in their exchanges despite the advantages the costs of pooling arrangements inefficient allocations of benefits and government regulations have been serious disincentives the relative tightness of agreements in 17 power pools demonstrates that tightly coordinated pools generally experience the most benefits 20 references dck

regulator heterogeneity and endogenous efforts to close the information asymmetry gap abstract the now standard principal agent model of regulator firm interactions typically assumes the presence of a single regulator and an exogenously determined information asymmetry between the principal and the agent in this paper we draw upon a unique data set of regulatory inspections conducted by the u s food and drug administration fda to explore the consistency of these assumptions with the actual practice of regulators we find that the canonical assumptions of the agency paradigm are strained by if not altogether inconsistent with the key practical realities of regulation by the fda our analysis uncovers several dimensions along which regulators actively and endogenously seek to close the information asymmetry gap we also find considerable regulator heterogeneity which in turn depends in part upon the specific training and experience of individual regulators

efficient regulation with little information reality in the limit we present a regulatory scheme that converges to ramsey pricing and productive efficiency even if regulators have little information about technology or demand the model has firms selecting prices subject to the regulator s requirement that the firm earn a fair return on capital at today s capital stock and output levels regulators then review later performance and are more likely to request new rate hearings as the firm s return deviates more from the fair return as long as regulators do not review negative returns too fast relative to positive returns these conditions are sufficient for convergence to ramsey prices and productive efficiency public utility regulators generally set prices not rates of return per se these prices however often are meant to achieve approximately some target rate of return but when projecting how prices will affect rates of return regulators are often at the mercy of the firms for economic projections about the effects of various price vectors e g across customer classes upon profits so if realized rates of return deviate from targets regulators may call new rate hearings and they may expedite these hearings if the deviations are large 2 by formalizing these real world observations some rather surprising efficiency results appear suppose that regulators have no knowledge of demands and technologies but can observe past realizations of prices and quantities if the review probabilities are as noted above and satisfy an asymmetry condition then this regulatory process may converge not only to productive efficiency overcoming averch johnson over capitalization effects but to ramsey prices these conclusions are derived from unifying and extending work by bawa and sibley 1980 and vogelsang and finsinger 1979

time of use pricing for load management programs in taiwan power company load management programs have been actively performed by the utilities to reduce peak demand and improve system load factor in recent years the time of use tou tariff based on the peak load pricing theory has been one of the most effective load management strategies proper tou rate structure can actually reflect the generation cost of electricity supplying and give a guideline for customers to modify the power consumption pattern so that the system load factor can be improved the inverse electricity pricing rule can be applied as the basis of tou pricing in this paper the price elasticities of industrial customers of taipower system are solved by the statistical regression model with 2620 data samples

regulated equity returns a puzzle abstract based on a database of u s electric utility rate cases spanning nearly four decades the returns on equity authorized by regulators have exhibited a large and growing premium over the riskless rate of return this growing premium does not appear to be explained by traditional asset pricing models often in direct contrast to regulators stated intent we suggest possible alternative explanations drawn from finance public policy public choice and the behavioral economics literature however absent some normative justification for this premium it would appear that regulators are authorizing excessive returns on equity to utility investors and that these excess returns translate into tangible profits for utility firms

dynamics of rate of return regulation under rate of return regulation a firm s product prices are constrained by the requirement that investors not earn more than an allowable return on the firm s assets this paper examines the dynamic properties of the rate of return regulation process when the regulated firm periodically undertakes new capacity investments our analysis identifies prices that correspond to stationary values of the regulation process it is shown that the underlying depreciation rules for property plant and equipment determine whether these stationary prices will be above equal to or below the long run marginal cost of providing the regulated service we provide conditions under which the rate of return regulation process is dynamically stable so that prices indeed converge to their stationary values the overall efficiency of this regulation method is shown to depend on how well the applicable depreciation schedule matches the productivity pattern of the assets in use this paper was accepted by gerard p cachon accounting

the equity and efficiency of two part tariffs in u s natural gas markets abstractresidential natural gas customers in the united states face volumetric charges that average about 30 percent more than the marginal cost of gas this inefficient departure from marginal cost pricing allows gas utilities to cover their fixed infrastructure and operating costs proposals for recovering these costs instead through fixed monthly fees are often opposed because of a widespread belief that current rate schedules have desirable distributional consequences using nationally representative household level data we show that the correlation between household income and natural gas consumption is indeed positive but surprisingly weak so current rate schedules are only mildly progressive in part we argue that this is because poor households tend to have larger families and less energy efficient homes we calculate bill impacts under a variety of scenarios and show that even a modest energy assistance program would more than offset the distributional impact of tariff rebalancing for most low

the multiproduct firm quality choice and regulation a monopolist facing a market of heterogeneous consumers will distort the quality a rray this paper explores three regulatory remedies minimum quality s tandards mqs maximum price regulation mpr and rate of return re gulation rorr that can counteract this distortion mqs and mpr rais e the quality offered to consumers with a low willingness to pay for quality while mqs have no effect on the quality offered to consumers with a high willingness to pay mpr decreases the quality offered to this group if production of high low quality goods is capital i ntensive rorr increases decreases the quality offered to both grou ps copyright 1988 by blackwell publishing ltd

impact of natural disasters on income inequality in sri lanka abstract we explore the relationship between natural disasters and income inequality in sri lanka as the first study of this nature for the country the analysis uses a unique panel data set constructed for the purpose of this paper it contains district inequality measures based on household income reported in six waves of the household income and expenditure survey of sri lanka during the period between 1990 and 2013 data on disaster affected population and other economic and social indicators employing a panel fixed effects estimator we find that contemporaneous natural disasters and their immediate lags significantly and substantially decrease inequality in per adult equivalent household income as measured by the theil index findings are robust across various inequality metrics sub samples and alternative estimators such as ordinary least squares and system gmm however natural disasters do not affect household expenditure inequality either households behave as if they have a permanent income or all households reduce their expenditure proportionately irrespective of their income level in responding to natural disasters natural disasters decrease non seasonal agricultural and non agricultural income inequality but increase seasonal agricultural income inequality income of richer households is mainly derived from non agricultural sources such as manufacturing and business activities and non seasonal agricultural activities poorer households have a higher share of agricultural income

firm and interruptible pricing patterns public versus private gas distribution utilities this study presents a model of the determination of firm and interruptible gas pricing patterns for a sample of municipal and private natural gas distribution utilities firm and interruptible gas pricing is widely used by gas distributors as an alternative to peak and off peak pricing how enterprise form affects these pricing patterns is the focus of this study although state regulated municipals are included in the analysis the focus of the investigation is on the difference between state regulated privates and locally regulated unregulated municipals since these are the major options from a public policy perspective the natural gas distribution industry is chosen for study since this industry is largely ignored in the empirical literature the few gas distribution pricing studies that exist are generally quite limited in scope examine the economic efficiency of private gas distributors from a cost and profit perspective or focus upon state regulatory effects on service contracts or private distributors pricing

natural disasters household welfare and resilience evidence from rural vietnam summary the study uses commune fixed effects regressions to estimate the effect of natural disasters on welfare and poverty of rural households in vietnam and subsequently examines household and community characteristics that can strengthen resilience of households to natural disasters we find that all the three disaster types considered in this study including storms floods and droughts have negative effects on household income and expenditure households in communes with higher mean expenditure and more equal expenditure distribution are more resilient to natural disasters access to micro credit internal remittances and social allowances can help households strengthen the resilience to natural disasters

integration of environmental concerns into agricultural policies of industrial and developing countries abstract the question which this paper addresses concerns the types of environmental and resource related agricultural policy adjustments that could properly address the costs of resource degradation and increase long term prospects for sustainable development various public policy approaches e g polluter pays principle fiscal measures regulations etc are discussed and analyzed with regard to their environmental and resource impacts the paper provides illustrative experiences from industrial and developing nations and where possible lessons and insights of relevance to policy making in developing countries are sought

pricing efficiency under rate of return regulation some empirical evidence for the electric utility industry the authors test quasi optimal pricing rules for rate of return regulation for a sample of electric utilities they estimate the regulated cost function and demand equations by class of customer for the sample to yield the cost and demand parameters required to assess the utility rate structures the results indicate that the price structure of electricity by class of customer is not quasi optimal and that welfare improvement might be possible under alternative prices searching for the price structure which satisfies the criteria they find that commercial users rates have been too high relative to residential and to a lesser extent industrial rates they note that commercial uses tend to be less organized and more poorly represented in the rate making process 16 references 8 tables

regulatory and life cycle influences on managerial incentives an important controversy persists in economics concerning the appropriateness of profit maximization as opposed to various competing nontraditional theories of the firm 13 of particular interest has been the comparative relevance of the sales maximization hypothesis suggested by baumol 4 and others a typical methodology employed to empirically analyze the profit versus sales maximization issue has been to question whether the financial rewards of top executives are more strongly influenced by corporate profit or sales performance it is implicitly assumed that the firm has a well defined set of organizational goals and that the structure of executive compensation is designed to provide executives with a consistent set of incentives therefore should profit performance constitute a significant determinant of executive compensation support for the profit maximization hypothesis would be gained on the other hand if executive compensation is closely related to firm sales then the nontraditional sales maximization hypothesis would be supported in an early empirical analysis of the issue mcguire chiu and elbing 14 found that sales and compensation were more highly correlated than were profits and compensation and therefore that the baumol hypothesis seemed most relevant lewellen and huntsman 12 pointed out however that mcguire et al had neglected to consider the deferred and contingent stock options etc elements of executive compensation and in so doing had perhaps biased their analysis against the profit maximization hypothesis by correctly considering the impact of corporate performance on the total compensation of top corporate executives lewellen and huntsman found strong support for the profit maximization hypothesis and no support for sales maximization in fact so convincing were the lewellen and huntsman results that they seemed to resolve the managerial motivation issue in favor of the traditional profit maximization model more recent empirical analyses however have tended to suggest that the issue is far from resolved baker 3 boyes and schlagenhauf 5 and ciscel and carroll 6 have all

ex ante rates of return for regulated utilitiest willard carleton 1974 recently demonstrated some subtle difficulties in the rate of return regulation of public utilities accounting rather than genuine opportunity costs influence the rates that are set and because there is no way to undo the consequences whenever regulatory lag prevents immediate adjustments to changes in the cost of capital there simply is no way to reflect genuine market effects on firms values the main cause of these difficulties demonstrated by carleton is the impossibility of continuously maintaining through administrative machinery an allowed rate of return in real terms but the regulatory task is also made more difficult by the fact that a mixture of nominal and real returns is supposed to determine the allowed rate of return according to the influential hope natural gas co decision 1 we shall illustrate the role of this latter provision by contrasting the effects of a change in bond interest rates on a regulated versus an unregulated firm and to avoid the consequent difficulties we suggest an alternative regulatory procedure similar to that proposed by justice brandeis in the southwestern bell telephone co case 2 he proposed reliance on nominal rather than real returns in public utility regulation we urge negotiation of returns on an ex ante rather than an ex post basis when a rate of return is established for a regulated utility today it typically has two main parts a return in real terms and one in nominal terms the nominal return is the return allowed to bondholders while the real return is the return allowed equity capital and the two are weighted together based on the proportions of debt and equity capital in the firm s capital structure 3 ordinarily we expect competitive markets to yield returns on assets in real terms but the returns allowed regulated firms under supreme court decisions gradually have shifted away from an entirely real return on assets wide ranging arguments over real returns followed the smyth v ames decision 1898 4 with its fair return on fair value guideline a nominal return was first urged in justice brandeis concurring minority opinion in the southwestern bell telephone co case which influenced the hope decision as grounds for dissenting from the opinion of the court in southwestern

u s industry adjustment to economic deregulation conomic deregulation does not happen overnight it takes time for lawmakers and regulators to dismantle regulatory regimes and then it takes more time for the deregulated industries to adjust to their new competitive environment federal regulatory agencies and the u s congress began liberalizing pricing entry and exit in the transportation financial energy and communications industries during the mid 1970s but while some smaller industries such as intercity bus transportation and air cargo have been fully deregulated during that time the only major american industries fully deregulated to date are airlines and motor carriers as to the pace of industry adjustment consider airlines economic deregulation of the airline industry began in 1974 when the civil aeronautics board first encouraged experiments with discount fares it was completed in 1983 when all regulations on fares entry and exit were eliminated yet more than 20 years after the deregulatory process began the airline industry continues to shed inefficiencies that accumulated over decades of regulation and to find new ways to market their service indeed the airlines latest marketing innovation selling discount fares on the internet would be illegal if fares were still regulated it is not surprising that deregulated or partially deregulated industries are slow to achieve maximum efficiency when regulatory restrictions on pricing operations and entry especially from new firms have been enforced for decades managers and employees of regulated firms settle into patterns of inefficient production and missed opportunities for technological advance and entry into new markets deregulation frees an industry from the state s control over prices entry and exit although of course firms are still subject to antitrust laws and safety regulations after deregulation some costs usually fall in short order but it takes

regulatory restructuring and incumbent price dynamics the case of u s local telephone markets prior to the telecommunications act of 1996 many u s states restructured their regulatory framework by replacing rate of return regulation with competition in both the local exchange service and local long distance markets and adopting price regulation price caps and price freezes using a panel data set of incumbent firm prices for three services i investigate whether price regulation and differences in entry conditions affect incumbent operators rate structures i find that competition has prompted a significant amount of rate rebalancing by reducing the amount of cross subsidization present in local telephone markets in addition the added flexibility of price cap regulation speeds the rate rebalance effects of competition

dynamics of price regulation we study the dynamics of price regulation for an industry adjusting to exogenous technological progress first we characterize the optimal capacity path and replacement cycles in a neoclassical investment model second we show that naive rate ofreturn regulation which ignores components of economic depreciation eventually results in a deficient level of capacity due to excessively high retail prices burdened by the need to recover the underdepreciated costs of historical investments third we explain how price cap regulation leads to more efficient capital replacement decisions compared to naive rate of return regulation and we show how finite price cap horizons distort capital replacement finally we interpret recent regulatory reforms in telecommunications markets

the impact of economic regulation on attempts to curb expense preference behavior a micro data analysis of ceo compensation schemes for electric utilities this study uses a large micro data set to present evidence which suggests that owners of regulated electric utilities have little incentive to structure ceo compensation packages in an effort to curb potential expense preference behavior because such potential behavior occurs or would occur at no cost to the firm or the firm s owners little incentive exists to structure compensation schemes in a way that would curb such behavior e g by compensating them with incentive bonus plans and stock options the results presented here augment those which examine other industries e g banking in an effort to point out the relationships between ownership organization political involvement and expense preference behavior

product complementarities capabilities and governance a dynamic transaction cost perspective the organization and governance of the transactions that comprise a bundling arrangement depend on the distribution of capabilities among firms and the amount of time during which the window of opportunity for earning rents is expected to remain open firms engaged in inter firm collaboration must undertake support transactions related to billing marketing customer support and product repair these support transactions differ from the core transactions that have traditionally been perceived as sufficient to provide a product bundle since support transactions create costs of their own the market may turn out to be an expensive means of governing collaborative arrangements undertaken for bundling purposes the telecommunications service sector provides an illustration copyright 1997 by oxford university press

the bell system divestiture deregulation and the efficiency of the operating companies abstract a variety of casual evidence has been offered in measurement of the efficiencies and inefficiencies thought to flow from the bell system divestiture and accompanying state regulatory reforms to address several questions in this regard we estimate a regulated cost function for local exchange services using panel data on the divested bell operating companies bocs divestiture and regulatory reform are found to have produced significant efficiencies as of 1993 saving about 20 percent in cost relative to what would have obtained in the absence of these events more specifically to 1993 the divestiture yielded savings of 115 4 billion and state level regulatory reform yielded a slightly smaller 96 7 billion in savings both measured in 1993 dollars output augmentation factor bias and allowed rate of return effects contribute in identified ways to these overall results

uniform and non uniform second best input taxes we investigate second best input based taxes foragricultural nonpoint pollution control when marketprices are endogenous and production isheterogeneous theoretically we derive the optimalforms of taxes which take account of heterogeneity non uniform taxes and a tax which does not auniform tax empirically we use a multi factor market equilibrium simulation model to determineoptimal tax rates and associated equity effects particularly differences in landowner gains lossesacross a heterogeneous region when market prices areendogenous second best tax policies result inpecuniary externalities that affect existingenvironmental externalities in particular thepecuniary externalities amplify the effect of producerheterogeneity on determination of sub regionaldifferences in tax rates and returns to land particularly for the uniform policy with endogenousprices the uniform tax rate is considerably higherthan any of the non uniform rates and ironically thenon uniform taxes result in less dispersion oflandowner gains across sub regions than the uniformtax

an examination of the effect of ownership on the relative efficiency of public and private water utilities the behavior of privately and publicly owned water utilities is examined by estimating a generalized variable cost function containing the regular characteristics of the neoclassical cost function without requiring that cost minimization subject to market prices be imposed as a maintained hypothesis assuming that unobserved shadow prices reflect the regulatory environment of the water industry tests for cost minimization are obtained by deriving shadow prices as functions of market prices the empirical results provide evidence that public water utilities are more efficient than private utilities on average but are more widely dispersed between best and worst practice

regulatory lag and deregulation with imperfectly adjustable capital abstract the dynamic effects of regularity lag and deregulation on the behavior of a firm with imperfectly adjustable capital are examined given adjustment costs and irreversible investment the firm reacts in advance to anticipated changes in regulation in the regulatory lag case capital increases after regulation is imposed the averch johnson effect is observed before regulation but not necessarily afterwards sufficient conditions are given for the capital bias to increase the regulated firm may choose inputs reflecting either a labor or capital bias in anticipation of deregulation sufficient conditions are given for the capital bias to be lessened by deregulation

a note on allowed and realized rates of return of the us electric utility industry most empirical investigations of electric utility behavior use the realized rate of return as a proxy for the allowed rate of return we examine the validity of this assumption and investigate the relationship of the allowed and realized rates to the cost of capital between 1973 and 1982 we use two measures of the cost of capital one based on returns to book equity the other derived from a market price of equity while realized and allowed rates were generally higher than the book measure throughout the period both of the rates of return were less than the market price of capital after 1979 we also find firms did not earn their allowed rate of return after 1974 therefore the use of the realized rate as a proxy for the allowed rate in empirical models will lead to biased parameter estimates to help correct this bias we give data for allowed rates

regulatory effects on electricity prices in hong kong abstract in hong kong electricity is supplied by two investor owned utilities china light and power company limited clp and the hongkong electric company limited hec these two utilities operate under a special regulatory arrangement known as the scheme of control which was proposed by the industry in 1964 the objective of this paper is to evaluate whether the scheme of control has fulfilled its original intention of protecting both the producer s right to serve and the consumer s right to be served our empirical results have indicated that the first scheme of control 1964 1978 had a greater effect on reducing electricity prices than the second one 1979 1992

regulation capital vintage and technical change in the electric utility industry this paper presents estimates of the rate of technical change in the electric power industry over the period 1951 78 the estimated model directly incorporates the effects of rate of return regulation and uses both a time trend and a vintage index to represent disembodied and embodied technical change respectively the results indicate that disembodied technical change was the primary source of cost reduction during 1951 70 and that tighter regulation as represented by a one point reduction in the rate of return would have reduced the rate of technical change by an average of 1 2 during 1951 78 34 references 18 footnotes 3 tables

the impact of regulation on economic growth in developing countries a cross country analysis summary the role of an effective regulatory regime in promoting economic growth and development has generated considerable interest among researchers and practitioners in recent years in particular building effective regulatory structures in developing countries is not simply an issue of the technical design of the most appropriate regulatory instruments it is also concerned with the quality of supporting regulatory institutions and capacity this paper explores the role of state regulation using an econometric model of the impact of regulation on growth the results based on two different techniques of estimation suggest a strong causal link between regulatory quality and economic performance