rural transformation inequality and the origins of microfinance abstract what determines the development of rural financial markets starting from a simple theoretical framework we derive the factors shaping the market entry of rural microfinance institutions across time and space we provide empirical evidence for these determinants using the expansion of credit cooperatives in the 236 eastern counties of prussia between 1852 and 1913 this setting is attractive as it provides a free market benchmark scenario without public ownership subsidization or direct regulatory intervention furthermore we exploit features of our historical set up to identify causal effects the results show that declining agricultural staple prices as a feature of structural transformation leads to the emergence of credit cooperatives similarly declining bank lending rates contribute to their rise low asset sizes and land inequality inhibit the regional spread of cooperatives while ethnic heterogeneity has ambiguous effects we also offer empirical evidence suggesting that credit cooperatives accelerated rural transformation by diversifying farm outputs

asset allocation and asset location household evidence from the survey of consumer finances abstract the rapid growth of assets in self directed tax deferred retirement accounts has generated a new set of financial decisions for many households in addition to deciding which assets to hold the traditional choice among bonds stocks and other investment classes households with substantial assets in both taxable and tax deferred accounts tda must now decide where to hold them this paper uses data from the survey of consumer finances to assess how many households have enough assets in both taxable and tax deferred accounts to face significant asset location choices it also investigates the asset location decisions these households make in 2001 49 of households had at least some assets in a tax deferred account and more than 11 million households had at least us 25 000 in both a taxable and a tax deferred account asset allocation inside and outside tax deferred accounts is quite similar with about 70 of assets in each location invested in equity securities roughly two thirds of households with financial assets in both taxable and tax deferred accounts hold portfolios that are tax efficient most of the other third could reduce their taxes by relocating heavily taxed fixed income assets to their tax deferred account for more than half of the households that hold apparently tax inefficient portfolios however a shift of less than us 10 000 in financial assets would eliminate tax inefficiency

tax planning of married couples and intra household income inequality abstract this paper examines tax planning of married couples under separate taxation it shows that concerns about the intra household income distribution prevent couples from minimizing tax payments the empirical analysis exploits a specific feature of the german tax system which allows married couples to save taxes by deviating from the default symmetric payroll tax treatment and assigning favorable tax treatment to the primary earner and unfavorable tax treatment to the secondary earner based on a representative random sample of individual tax files we find that a couple is less likely to choose the tax minimizing treatment if tax planning is associated with a larger decline of the net of tax income of the secondary earner this applies regardless of whether the husband or the wife is the main earner however couples where the wife is the main earner are generally more reluctant to assign the more favorable tax treatment to the wife

making the case for grid connected photovoltaics in brazil abstract in the developed world grid connected photovoltaics pvs are the fastest growing segment of the energy market from 1999 to 2009 this industry had a 42 compound annual growth rate from 2009 to 2013 it is expected to grow to 45 and in 2013 the achievement of grid parity when the cost of solar electricity becomes competitive with conventional retail including taxes and charges grid supplied electricity is expected in many places worldwide grid connected pv is usually perceived as an energy technology for developed countries whereas isolated stand alone pv is considered as more suited for applications in developing nations where so many individuals still lack access to electricity this rationale is based on the still high costs of pv when compared with conventional electricity we make the case for grid connected pv generation in brazil showing that with the declining costs of pv and the rising prices of conventional electricity urban populations in brazil will also enjoy grid parity in the present decade we argue that governments in developing nations should act promptly and establish the mandates and necessary conditions for their energy industry to accumulate experience in grid connected pv and make the most of this benign technology in the near future

wealth and portfolio composition theory and evidence we examine a survey of 6010 u s households and estimate a model for household portfolio allocation we extend the conventional portfolio choice model in order to capture the observed incompleteness of household portfolios we show that the empirical specification of the joint discrete and continuous choice that characterizes household portfolio behavior is a switching regressions model with endogenous switching we go on to examine the impact of taxes on portfolio composition using detailed survey data to calculate precisely the marginal tax rate facing each household finally we estimate wealth elasticities of demand for a range of assets and liabilities

electoral cycles in savings bank lending we provide evidence that german savings banks which are controlled by county level politicians systematically adjust lending policies in response to local electoral cycles the different timings of county elections across states and the existence of a comparable group of cooperative banks that are very similar to savings banks but lack their political connectedness allow for identification of the effects of county elections on savings bank lending these effects are economically meaningful and very robust to various specifications we find that election induced lending negatively impacts savings bank profitability and is associated with an increase in credit defaults roughly three years after an election examining the political economy aspects of our findings we provide evidence that savings bank excess lending and public spending at the county level are substitute levers for county politicians finally we find indications that subpar pre election economic county performance hurts re election prospects and increases the intensity of lending cycles

differential income taxation and household asset allocation this article empirically investigates the effects of differential income taxation on households portfolio choice and asset allocation applying a two stage budgeting model of asset demand to german survey data the model is structured into the discrete and the continuous asset choice cross sectional variation in marginal tax rates appropriately instrumented as well as over time variation from a major tax reform are used to identify the tax effects households with higher tax rates are found to have relatively greater demand for tax privileged assets such as nonowner occupied housing mortgage repayments building society deposits stocks insurances and consumer credits than households with lower tax rates demand at higher tax rates is lower for owner occupied housing bank deposits and bonds

stockholding behavior of u s households evidence from the 1983 1989 survey of consumer finances most households persistently invest in riskless assets but not stocks and may do so because they perceive information required for market participation to be costly relative to expected benefits in a consumption capital asset pricing model ccapm increased risk aversion income risk and lower resources reduce the information expense sufficient to deter stockholding bivariate probit analysis using the 1983 1989 survey of consumer finances shows that households with lower risk aversion higher education and greater wealth who were nonstockholders in 1983 had an increased conditional probability of entering by 1989 whereas 1983 stockholders with lower resources more limited education and greater risk aversion were more likely to be nonstockholders by 1989

residential energy efficiency and distributed generation natural partners or competition abstract residential energy efficiency and distributed generation seem to be natural partners in our journey towards a more sustainable energy future a growing range of energy efficient consumer technologies and extraordinary declines in photovoltaics system prices has seen household electricity demand fall whilst a growing proportion of the remaining load is provided by household self generation australia is a particularly interesting example of these developments with around 15 of households now possessing a pv system while per capita household demand has also fallen markedly however existing retail electricity tariffs and regulatory arrangements can create mixed incentives for households contemplating both pv and energy efficiency options and for their network service providers this is certainly the case in australia with net metering arrangements that value self consumption of pv far more than pv exports to the grid there are also complex benefits for the electricity network created by these household energy resources that can be significant in this paper we use real household load and pv data from sydney households to model the potential implications of existing electricity tariff arrangements on the financial attractiveness of pv and energy efficiency we model these options separately and in combination for both households implementing these options and their network service providers our results highlight how inappropriate tariffs may well adversely impact on the value that the combination of energy efficiency and pv offers not only to households but also to their network service providers and suggest ways that such impacts might be ameliorated by acknowledging the benefits that these resources can offer to the electricity network

rural finance and agricultural technology adoption in ethiopia does the institutional design of lending organizations matter summary it has now become almost a stylized fact that sustained agricultural growth is central to rapid poverty reduction and economic development yet world poverty is largely concentrated in the agrarian societies which have the potential for agricultural productivity growth this is particularly true for sub saharan african countries where the gaps between potential and actual yields remain high minimizing this gap through the promotion of modern inputs such as fertilizer and modern seeds has been at the core of almost all development strategies in ethiopia among other initiatives the country has promoted microfinance institutions and member owned financial cooperatives to alleviate credit constraints of the smallholder farmers this paper analyzes the impacts of these institutions using household survey data and a propensity score matching technique we examine the effects that institutional financial services have on farmers adoption of agricultural technology in ethiopia the results suggest that access to institutional finance has a significant positive impact on both the adoption and extent of technology use however when impacts are disaggregated by type of financial institution and farm size heterogeneities are observed in particular financial cooperatives have a greater impact on technology adoption than microfinance institutions and the results appear to vary depending on farm size and types of inputs the paper concludes with implications for policies to promote adoption of modern agricultural inputs

the saving behaviour of a two person household the facts that wives are typically younger than their husbands and that women typically live longer than men imply that wives may have more incentive to save for old age than do husbands a theoretical model of the determination of household saving and portfolio choice is introduced which takes into account differences in preferences for saving the most important result is that the level and the composition portfolio of saving and the time path of consumption are dependent on the distribution of income within the household women typically live longer than men and wives are typically younger than their husbands these two facts imply that preferences about saving for old age in married households with forward looking members may differ between husband and wife this paper presents a theoretical analysis of saving and portfolio behaviour if the members of the household have differ ent preferences over future consumption as compared to current consump tion the analysis stands in contrast to unitary models of household intertemporal allocation which assume that the household has a single utility function thus this paper is a contribution in a novel context to the burgeoning literature on intra household decision making the base case analysis is for a simple two person husband and wife1 two period model in which there is only one asset saving it is assumed that because of the two facts given at the start of the introductory paragraph the husband discounts the future more than the wife in section ii the implications of a non cooperative decision making process for the base case are derived see ulph 1988 for a non cooperative model of demand and

why do financial systems differ history matters abstract we describe a dynamic model of financial intermediation in which fundamental characteristics of the economy imply a unique equilibrium path of bank and financial market lending yet we also show that economies whose fundamental characteristics have converged may continue to have very different financial structures because setting up financial markets is costly in our model economies that emphasize bank lending are more likely to continue doing so in the future all else equal

taxation and household portfolio composition us evidence from the 1980s and 1990s abstract this paper explores the relationship between household marginal income tax rates the set of financial assets that households own and the portfolio shares accounted for by each of these assets it analyzes data from the 1983 1989 1992 1995 and 1998 surveys of consumer finances and develops a new algorithm for imputing federal marginal tax rates to households in these surveys the empirical findings suggest that marginal tax rates have important effects on asset allocation decisions the probability that a household owns tax advantaged assets such as tax exempt bonds or assets held in tax deferred accounts is positively related to its tax rate on ordinary income in addition the portfolio share invested in corporate stock which is taxed less heavily than interest bearing assets is increasing in the household s ordinary income tax rate holdings of heavily taxed assets such as interest bearing accounts decline as a share of wealth as a household s marginal tax rate increases

tax preferred savings accounts and marginal tax rates evidence on rrsp participation the effect of taxes on participation in registered retirement savings plans between 1982 and 1996 is studied interprovincial changes in the tax structure over this period provide identifying variation using this variation i find that taxes influence households participation decisions but more weakly than previously estimated a 10 percentage point increase in the marginal tax rate is estimated to increase the probability of participation by 8 per cent this explains only 5 1 per cent of the trend in participation i also find suggestive evidence that the carryforward mechanism may be used as an instrument for tax base smoothing jel classification h24 comptes d epargne fiscalement privilegies et taux marginaux d imposition resultats sur la participation aux regimes enregistres d epargne retraite reer ce memoire etudie les effets du regime d imposition sur la participation aux regimes enregistres d epargne retraite reer entre 1982 et 1996 les changements dans la structure d imposition d une province a l autre au cours de la periode fournissent un eventail de possibilites utilisant cet eventail l auteur decouvre que le regime fiscal influence les decisions de participer des menages mais plus faiblement qu on l avait estime precedemment un accroissement de 10 pour cent dans le taux marginal d imposition accroit la probabilite de participation de 8 pour cent voila qui explique seulement 5 1 pour cent de la tendance dans la participation l auteur decouvre aussi que le mecanisme de report dans le temps de la portion inutilisee de la contribution aux reer peut etre utilise comme instrument de lissage de la base de revenus imposables

income splitting among the self employed under individual taxation with progressive marginal tax rates households in which the distribution of income is unequal benefit from attributing income to the lower income household member self employment provides greater potential to split income in this way because of the absence of a third party reporting income using the canadian experience as a case study this paper develops a unique estimator of the incidence of illegal income splitting among self employed couples the results suggest that the incidence of income splitting among self employed men in canada is non trivial but no evidence is found that self employed women attribute income to their spouses jel classification h26 h21 h31 j22 le fractionnement du revenu chez les travailleurs autonomes dans un regime fiscal qui a des taux marginaux d imposition progressive des revenus les membres d un menage dans lequel la repartition des revenus n est pas g rien n indique que les femmes qui sont travailleurs autonomes attribuent une portion de leurs revenus a leur epoux

investment banks as corporate monitors in the early twentieth century united states we study the effect of financial relationships on firms investment decisions and access to external finance in the early twentieth century securities underwriters commonly held directorships with american corporations section 10 of the clayton antitrust act prohibited bankers from serving on the boards of railroads for which they underwrote securities we find that following the implementation of section 10 railroads with strong preexisting relationships with underwriters saw declines in their investment rates valuations and leverage and increases in their costs of external funds reassuringly we do not observe similar effects among industrials and utilities which were not subject to section 10 our results are consistent with underwriters on corporate boards acting as delegated monitors and highlight the potential for regulations intended to address conflicts of interest to disrupt valuable information flows

personal taxation pension wealth and portfolio composition this paper emphasizes the roles played by personal taxation and pension wealth in portfolio choice and composition a theoretical discussion of the impacts of taxation and participation in social security and private pension systems on individual wealth allocation is followed by empirical evidence based on u s cross section data both effects prove to be significant anticipated social security and private pension benefits exert a measurable influence on household portfolio allocation their omission from an asset demand model may lead to a misinterpretation of the impact of taxation on portfolio composition

capital market information and industrial performance the role of west german banks in orthodox theory external capital markets play a dual role supplying various forms of investment finance and disciplining firms which are inefficient or fail to pursue profit goals an extensive literature speaks of the efficiency of external capital markets meaning that firms can make production investment decisions and investors can choose among the securities that represent ownership of firms activities under the assumption that security prices at any time fully reflect all available information fama i970 1 however this concept of efficiency is purely technical it depends critically on what information is available and we know there are problems of appropriability and failure in information markets deriving ultimately from certain peculiarities of information as a commodity arrow i962 thus another growing literature focusses on problems of achieving equilibrium in markets where agents are imperfectly or asymmetrically informed amongst other things this literature shows that informational failures of the kind in question can lead to capital rationing in loan and credit markets and the use of strict collateral requirements as screening devices jaffee and russell i976 stiglitz and weiss i98i cable and turner i983 these may then be expected to affect the efficiency of individual firms and the system as a whole capital shortage implies that some profitable investment opportunities are foregone and production choices may also be distorted by the need to satisfy additional financial constraints contrived to elicit signals of creditworthiness of the firms undertaking them similarly the disciplining role of external capital markets can be impaired by information impactedness williamson i975 and the costs of mobilising and giving effect to shareholders preferences thus in the principal agent framework developed by jensen and meckling i976 and fama i980 the degree of constraint on managerial pursuit of non profit goals as posited by managerial theorists depends on the transactions costs of stock owner intervention the result is an optimal degree of departure from cost minimising profit maximising behaviour determined by the level of transactions costs institutional factors which affect the way information is distributed amongst agents can therefore have an important bearing on allocative and technical efficiency and the west german system of industrial finance provides an in

financial intermediation and delegated monitoring this paper develops a theory of financial intermediation based on minimizing the cost of monitoring information which is useful for resolving incentive problems between borrowers and lenders it presents a characterization of the costs of providing incentives for delegated monitoring by a financial intermediary diversification within an intermediary serves to reduce these costs even in a risk neutral economy the paper presents some more general analysis of the effect of diversification on resolving incentive problems in the environment assumed in the model debt contracts with costly bankruptcy are shown to be optimal the analysis has implications for the portfolio structure and capital structure of intermediaries

historical financing of small and medium size enterprises we focus on the economies of the north atlantic core during the 19th and early 20th centuries and find that an impressive variety of local financial institutions emerged to supply the needs of smes wherever there was sufficient demand for their services although these intermediaries had significant weaknesses they were able to tap into local information networks and so extend credit to firms that were too young or small to secure funds from large regional or national institutions in addition by raising the return to savings for local households they helped to mobilize significant new resources for economic development

did tax flattening affect rrsp contributions in 1988 marginal personal income tax rates changed in canada for some individuals by reasonably substantial amounts in this note a large sample of tax filer data is examined and the conclusion is drawn that when attention is paid to the possible confounding of marginal tax rate and non linear income effects there is no convincing evidence that the tax rate changes affected contributions to registered retirement saving plans rrsps est ce que l aplatissement des taux d imposition influence les contributions au reer en 1988 les taux marginaux d imposition du revenu personnel ont change au canada et pour certaines personnes ces changements ont ete substantiels cette note examine un grand echantillon de rapports d impots et en arrive a la conclusion que quand on prend en compte le melange possible des effets du taux marginal d imposition et des effets de revenu non lineaires il n y a pas de resultats qui montrent de facon probante que les changements dans les taux d imposition ont influence les contributions au reer

delegated monitors large and small germany s banking system 1800 1914 banks play a greater role in the german financial system than in those of the united states or britain germany s large universal banks are admired by those who advocate bank deregulation in the united states others admire the universal banks for their supposed role in corporate governance and industrial finance many discussions distort the german banking system by overstressing one of several types of banks and ignore the competition and cooperation between the famous universal banks and other banking groups tracing the historical development of the german banking system from the early nineteenth century places the large universal banks in context

relationship banking liquidity and investment in the german industrialization close bank relationships are thought to ameliorate firms liquidity constraints a phenomenon frequently measured by liquidity sensitivity of investment using german firms during the formative years of universal banking 1903 1913 this paper shows that even controlling for selection bias investment is more sensitive to internal liquidity for bank networked firms than unattached firms the firm exhibiting the greatest liquidity sensitivity however faced no apparent liquidity constraint the findings yield two implications they support recent research rejecting a linear relationship between liquidity sensitivity and financing constraints and they suggest that relationship banking provides no consistent lessening of firms liquidity sensitivity

new evidence on taxes and portfolio choice abstract identifying the effect of differential taxation on portfolio allocation requires exogenous variation in marginal tax rates marginal tax rates vary with income but income surely affects portfolio choice directly in systems of individual taxation like canada s couples with the same household income can face different effective tax rates on capital income when labor income is distributed differently within households using this source of variation we find portfolio responses to taxation among more affluent households the estimated effects are statistically significant but economically modest in a placebo test using data from the u s which has joint taxation we find no effect of the intra household distribution of labor income on portfolios

the role of demandable debt in structuring optimal banking arrangements demandable debt finance by banks warrants explanation because it entails costs of bank suspension liquidation and idle reserve holdings an explanation is developed in which demandable debt provides incentive compatible intermediation where the banker has comparative advantage in allocating investment funds but may act against the interests of uninformed depositors demandable debt attracts funds by giving depositors an option to force liquidation its usefulness in transacting follows from information sharing between monitors and nonmonitors copyright 1991 by american economic association

the private and public economics of renewable electricity generation generating electricity from renewable sources is more expensive than conventional approaches but reduces pollution externalities analyzing the tradeoff is much more challenging than often presumed because the value of electricity is extremely dependent on the time and location at which it is produced which is not very controllable with some renewables such as wind and solar likewise the pollution benefits from renewable generation depend on what type of generation it displaces which also depends on time and location without incorporating these factors cost benefit analyses of alternatives are likely to be misleading other common arguments for subsidizing renewable power green jobs energy security and driving down fossil energy prices are unlikely to substantially alter the analysis the role of intellectual property spillovers is a strong argument for subsidizing energy science research but less persuasive as an enhancement to the value of installing current renewable energy technologies

an evaluation of the installation of solar photovoltaic in residential houses in malaysia past present and future abstract this paper examines solar energy development in malaysia particularly in relation to the installation of solar photovoltaic pv in residential houses it analyzes the past activities related to solar energy in malaysia in terms of research and developments r ds the implementations used as well as the national policies for the past 20 years which have pushed the installation of pv in the country the feed in tariff fit scheme is discussed showing comparative cost benefit analysis between the pv installation in houses in the united kingdom uk and malaysia and with other investment schemes available in malaysia to investigate the awareness of renewable energy policies and incentives a preliminary survey of the public opinion in malaysia has been carried out and an evaluation of public willingness to invest in the fit scheme by installing the pv on their houses is presented the cost benefit analysis shows that the proposed fit programme is capable of generating good return on investment as compared to the one in the uk but the return is lower than other investment tools the survey suggests that most malaysians are unaware of the government s incentives and policies towards renewable energies and are not willing to invest in the fit scheme

thy neighbor s keeper the design of a credit cooperative with theory and a test economists now appreciate that resource allocation in less economically developed economies is profoundly influenced by non firm economic institutions however our theories of non firm institutions often suggest different answers to many questions including those of policy this paper illustrates a method for discriminating between alternative theories using data from german credit cooperatives from the nineteenth and early twentieth century germany we build a model of credit cooperatives designed to provide monitoring incentives and test this using nineteenth century data authors

the economic effect of electricity net metering with solar pv consequences for network cost recovery cross subsidies and policy objectives abstract net metering is commonly known as a practice by which owners of distributed generation dg units may offset their electricity consumption from the grid with local generation the increasing number of prosumers consumers that both produce and consume electricity with solar photovoltaic pv generation combined with net metering results in reduced incomes for many network utilities worldwide consequently this pushes utilities to increase charges per kw h in order to recover costs for non pv owners this could result into inequality issues due to the fact that also non pv owners have to pay higher chargers for their electricity consumed to make up for netted costs of pv owners in order to provide insight in those inequality issues caused by net metering this study presents the effects on cross subsidies cost recovery and policy objectives evolving from different applied netmetering and tariff designs for a residential consumer eventually this paper provides recommendations regarding tariffs and metering that will result in more explicit incentives for pv instead of the current implicit incentives which are present to pv owners due to net metering

banks as coordinators of economic growth and stability microfoundation for macroeconomy with externality abstract competition among banks promotes growth and stability for an economy with production externality following arrow and debreu 1954 6 i formulate a standard growth model with externality a two period version of romer 1986 39 as a game among consumers firms and intermediaries the walrasian equilibrium with an auctioneer does not achieve the social optimum without an auctioneer or intermediaries i show that no nash equilibrium exists with several banks strategically intermediating capital a nash equilibrium emerges with a realistic institution i e an interbank market with a negotiation process in the loan market the equilibrium outcome is uniquely determined and socially optimal

profitability analysis of grid connected photovoltaic facilities for household electricity self sufficiency abstract spain exhibits a high level of energy dependence and has significant solar energy resources these two facts have given rise to the prominence that renewable energy particularly solar photovoltaic technology has enjoyed in recent years supported by a favorable regulatory framework currently the spanish government is providing new ways in energy policy to enhance and accelerate the development of low power photovoltaic generation facilities for self consumption by introducing energy policies for feed in payments of surplus electricity such facilities are an example of distributed electrical generation with important benefits for the environment and the rest of the electrical system because when properly managed they can help improve the system s stability and reduce overall losses by analyzing household demand and solar photovoltaic energy resources the profitability of such facilities is considered in this article taking into account the technical and economic impact of storage systems and proposing models for feed in payments of surplus electricity in an attempt to assess whether this method of electricity generation versus the method of conventionally supplied power from a grid at a regulated tariff can rival each other economically in terms of parity

taxation and the portfolio structure of spanish households using a sample of 5962 spanish households from the survey of household finances eff undertaken by the bank of spain this article describes the structure of their portfolio and estimates both a probit model and a tobit model to test how taxation affects respectively the decision to invest in each asset and the relative importance of each asset within the household portfolio the influence of taxation is measured using the average marginal personal income tax rate of the household the estimations performed show that the marginal tax rate is significant and displays the sign expected to explain both the holding of tax favourable assets and their weight in the household portfolio

quantifying the financial impacts of net metered pv on utilities and ratepayers abstract deployment of customer sited photovoltaics pv in the united states has expanded rapidly in recent years driven by falling pv system prices the advent of customer financing options and various forms of policy support at the federal state and local levels with the success of these efforts heated debates have surfaced in a number of u s states about the impacts of customer sited pv on utility shareholders and ratepayers we performed a scoping analysis using a financial model to quantify the financial impacts of customer sited pv on utility shareholders and ratepayers and to assess the magnitude of these impacts under alternative utility conditions we find that customer sited pv generally reduces utility collected revenues greater than reductions in costs leading to a revenue erosion effect and lost future earnings opportunities we also find that average retail rates increase as utility costs are spread over a relatively smaller sales base we analyze these results under various assumptions about utility operating and regulatory environments and find that these impacts can vary greatly depending upon the specific circumstances of the utility based on this analysis we highlight potential implications for policymakers and identify key issues warranting further analysis

peer monitoring and credit markets a major problem for institutional lenders is ensuring that borrowers exercise prudence in the use of the funds so that the likelihood of repayment is enhanced one partial solution is peer monitoring having neighbors who are in a good position to monitor the borrower be required to pay a penalty if the borrower goes bankrupt peer monitoring is largely responsible for the successful financial performance of the grameen bank of bangladesh and of similar group lending programs elsewhere but peer monitoring has a cost it transfers risk from the bank which is in a better position to bear risk to the cosigner in a simple model of peer monitoring in a competitive credit market this article demonstrates that the transfer of risk leads to an improvement in borrowers welfare

are small scale grid connected photovoltaic systems a cost effective policy for lowering electricity bills and reducing carbon emissions a technical economic and carbon emission analysis this research discusses findings from technical simulations and economic models of 1kw p and 3kw p grid connected photovoltaic pv systems supplying a rural home electricity load in parallel with the electricity network in western australia wa the technical simulations are based on electricity billing consumption monitoring an energy audit data combined with 15min interval load and pv system performance for commercially available technologies and balance of system components using long term meteorological input data the economic modelling uses 2010 market prices for capital costs operational costs electricity tariffs subsidies and is based on discounted cash flow analyses which generate a final net present value npv for each system against network electricity costs in australian dollars aud over a 15 year investment horizon the results suggest that current market prices generate a negative npv a net private loss even with the current government subsidies which lead to higher home electricity costs than conventional network electricity use additionally the private costs of carbon emission mitigation aud tco 2 e 1 for the grid connected pv system simulations and models were around aud 600 700 tco 2 e 1 a particularly expensive option when compared to existing large scale renewable energy mitigation activities

comparative economic analysis of supporting policies for residential solar pv in the united states solar renewable energy credit srec potential numerous studies and market reports suggest that the solar photovoltaic markets rely heavily if not entirely upon governmental support policies at present unlike in other countries where these policies are enacted at a national level the 50 states in the us pursue different policies in an attempt to foster the growth of renewable energy and specifically solar photovoltaics this paper provides an economic and financial analysis of the us federal and state level policies in states with solar targeted policies that have solar renewable energy credits srec markets after putting a value on srecs this study further compares solar carve outs with other incentives including the federal tax credit net metering and state personal tax credits our findings show that srec markets can certainly be strong with new jersey delaware and massachusetts having the most potential despite their strong potential as effective renewable policies the lack of a guaranteed minimum and the uncertainty attached are major drawbacks of srec markets however the leveraging of this high value offers hope that the policies will indeed stimulate residential solar photovoltaic markets

the solar photovoltaic feed in tariff scheme in new south wales australia solar photovoltaic pv electricity systems are part of australia s energy supply matrix in the case of new south wales nsw the state government has had to deal with a complex policy problem in order to play its role in the federal small scale renewable energy scheme the nsw government initiated the 7 year solar bonus scheme in 2010 however in attempting to maximise community investment in small scale solar pv systems it relied on faulty financial modelling that applied a generous feed in tariff fit and underestimated the level of investor participation and installed capacity consequently the scheme has resulted in very high public costs that will require policy changes that bring investors and energy retailers into conflict and unpopular electricity retail price adjustments this paper uses a structured case and stakeholder analysis to critically analyse the fit policy while also highlighting important lessons for policymakers engaging in fit design

the dynamics of solar pv costs and prices as a challenge for technology forecasting an effective energy technology strategy has to balance between setting a stable long term framework for innovation while also responding to more immediate changes in technology cost and performance over the last decade rather than a steady progression along an established learning curve pv costs and prices have been volatile with increases or plateaus followed by rapid reductions the paper describes and considers the causes of recent changes in pv costs and prices at module and system level both international trends and more place specific contexts it finds that both module and system costs and price trends have reflected multiple overlapping forces established forecasting methods experience curves and engineering assessments have limited ability to capture key learning effects behind recent pv cost and price trends production scale effects industrial re organization and shakeouts international trade practices and national market dynamics these forces are likely to remain prominent aspect of technology learning effects in the foreseeable future and so are in need of improved more explicit representation in energy technology forecasting

the impact of separate taxation on the intra household allocation of assets evidence from the uk abstract the income tax system in the united kingdom moved from joint to independent taxation of husbands and wives income in 1990 one interesting aspect of independent taxation is the ability for households to choose the division of household assets between the two spouses this tax reform therefore creates an opportunity for households to engage in a form of tax avoidance by shifting their investment income to the spouse with the lower marginal tax rate we use family expenditure survey fes data to examine the impact of this tax reform on the magnitude of investment income shifting between spouses with different marginal tax rates we find a sizeable shift in the share and incidence of asset income claimed by wives who typically have lower marginal tax rates as well as in the incidence of the wife claiming all the household asset income indicating that households responded to this policy change by reallocating asset ownership

optimal dynamic tax evasion a portfolio approach abstract most tax evasion models are set in a timeless environment though this is not suitable for a study of revenues from financial activities where tax evasion occurs in a dynamic environment this study examines a representative agent aiming to maximize the expected utility from inter temporal consumption and could invest in both riskless and risky assets through tax evasion is possible only in the latter case the investor must pay a fine when his her evasion is detected with a given probability we show that i optimal consumption is higher with tax evasion ii optimal evasion is affected by neither the return nor the volatility of the risky asset iii evasion reduces investment in the risky asset and increases investment in the riskless asset iv evasion can be reduced more efficiently by increasing the fine rather than by increasing the frequency of controls v for a sufficiently high tax rate on the riskless asset the optimal evasion is zero and vi if the fine is proportional to the amount of taxes for only sufficiently low fines the yitzhaki 1974 paradox is confirmed

returns on investments in energy saving technologies under energy price uncertainty in dutch greenhouse horticulture conventional net presentvalue calculations evaluating the profitabilityof investments in energy saving technologies indutch horticultural outlays predict a muchhigher rate of adoption of these technologiesthan is actually observed this paper tries toexplain this gap by applying a real optionsframework hurdle rates for investments in twotypes of energy saving technology are estimatedusing simulated future revenue streams givenuncertainty regarding energy prices and energytax policies hurdle rates found in this wayare on average about 1 76 times the hurdlerates that result from net present valuecalculations furthermore this paper tests thepredictive value of the theory by estimating alogit model this model relates the incidenceof having invested in an energy savingtechnology to the difference between the returnon investment and the hurdle rate thepredictive power turns out to be encouraging as the statistical tests indicate that higherhurdle rates tend to reduce rates of technologyadoption

electricity market design for facilitating the integration of wind energy experience and prospects with the australian national electricity market abstract australia has been an early and enthusiastic adopter of both electricity industry restructuring and market based environmental regulation the australian national electricity market nem was established in 1999 and australia also implemented one of the world s first renewable energy target schemes in 2001 with significant recent growth in wind generation australia provides an interesting case for assessing different approaches to facilitating wind integration into the electricity industry wind project developers in australia must assess both potential energy market and tradeable green certificate income streams when making investments wind farm energy income depends on the match of its uncertain time varying output with the regional half hourly market price a price that exhibits daily weekly and seasonal patterns and considerable uncertainty such price signals assist in driving investments that maximize project value to the electricity industry as a whole including integration costs and benefits for other participants recent nem rule changes will formally integrate wind generation in the market s scheduling processes while a centralized wind forecasting system has also been introduced this paper outlines experience to date with wind integration in the nem describes the evolution of market rules in response and assesses their possible implications for facilitating high future wind penetrations

financial development and economic growth views and agenda this critique argues that the preponderance of theoretical reasoning and empirical evidence suggests a positive first order relationship between financial development and economic growth the body of work would push even most skeptics toward the belief that the development of financial markets and institutions is a critical and inextricable part of the growth process and away from the view that the financial system is an inconsequential sideshow responding passively to economic growth many gaps remain however and the paper highlights areas in acute need of additional research

state level benefits of energy efficiency this paper describes benefits attributable to state level energy efficiency programs nationwide state level energy efficiency programs have targeted all sectors of the economy and have employed a wide range of methods to promote energy efficiency standard residential and industrial programs typically identify between 20 and 30 energy savings in homes and plants respectively over a 20 year period of time an average state that aggressively pursues even a limited array of energy efficiency programs can potentially reduce total state energy use by as much as 20 well designed energy efficiency programs can be expected to help overcome numerous barriers to the market penetration of energy efficient technologies and accelerate the market penetration of the technologies energy efficiency programs are cost effective typical benefit cost ratios exceed 3 1 and are much higher when non energy and macroeconomic benefits are included indeed energy efficiency and associated programs and investments can create significant numbers of new jobs and enhance state tax revenues several states have incorporated energy efficiency into their economic development programs it should also be noted that increasing amounts of venture capital are being invested in the energy sector in general and in specific technologies like solar power in particular

why does liquidity matter in investment equations that liquidity variables affect investment spending is widely accepted despite important recent empirical work questions remain concerning the interpretation of liquidity variables in investment equations and the sources and economic importance of finance constraints these questions are addressed by estimating a variety of econometric models that exploit distinctive canadian institutional features to identify firms that face relatively severe information problems the initial econometric evidence confirms the existence of finance constraints and identifies their source as the problems faced by firms in credibly communicating private information to outsiders this conclusion is robust to biases from the capitalization of finance constraints into asset prices scale economies or imperfect competition which are accounted for directly in the econometric specifications copyright 1995 by ohio state university press