towards a vanishing middle competition in the world garment industry abstract the international garment industry falls broadly into two segments one which may be referred to as the fashion segment is governed by competition based on new product introduction and quality improvements the other segment comprising of mass produced garments is governed by price competition while there is some evidence that the fashion sector is growing in importance our concern in this paper will be the price competitive sector which has been and continues to be predominantly the main arena in which newly industrializing and developing countries participate

macroeconomics with endogenous markups and optimal taxation i augment a flexible price dynamic general equilibrium model with any symmetric intratemporal preferences over a variety of goods supplied under monopolistic bertrand or cournot competition to derive implications for business cycle and market inefficiencies endogenous markups can magnify the impact of shocks on consumption and labor supply through intertemporal substitution mechanisms and the optimal fiscal policy requires a variable labor income subsidy and a capital income tax that converges to zero in the long run with an endogenous number of goods and strategic interactions entry also affects markups and the optimal fiscal policy requires also a tax on profits i characterize equilibrium and efficient market structures and derive optimal tax rules for a variety of preferences including a new type of general additive preferences that nest direct indirect implicit and homothetic additivity

residential energy demand and the interaction of price and temperature british experimental evidence the responsiveness of heating energy demand to pricing is shown to be dependent on temperature and vice versa this is investigated empirically using residential electricity demand data obtained under conditions of price variation from a british time of use pricing experiment results confirm that consumer responses to higher electricity prices are conditional on temperature levels particularly during the daytime and for households with high overall levels of electricity consumption and previous experience of time of use tariffs

the heckscher ohlin model with monopolistic competition and general preferences abstract i extend the neoclassical 2 2 2 trade model to general preferences over a variety of goods supplied under monopolistic competition in a sector while the other sector is perfectly competitive non homothetic preferences deliver pricing to market incomplete pass through and market size effects under realistic conditions the differentiated goods are sold at a higher price in the capital abundant country

time varying parameters in the almost ideal demand system and the rotterdam model will the best specification please stand up this article assesses the ability of the rotterdam model rm and of three versions of the almost ideal demand system aids to recover the time varying elasticities of a true demand system and to satisfy theoretical regularity using monte carlo simulations we find that the rm performs better than the linear approximate aids at recovering the signs of all the time varying elasticities more importantly the rm has the ability to track the paths of time varying income elasticities even when the true values are very high the linear approximate aids not only performs poorly at recovering the time varying elasticities but also badly approximates the nonlinear aids

an updating country study thailand s needs and prospects in the 1990s abstract as one of the fastest growing economies of the latter half of the 1980s thailand is rapidly emerging as one of the new nics in seeking to examine the major issues facing thailand in the 1990s our paper focuses on two major themes first we address the trade and industrial policy issue while our conclusions favor a fairly orthodox open trade pattern of industrialization favoring functional rather than selective intervention we question the wisdom of trusting thai growth to the single engine of exports the second theme of the paper underlines the need for reasons of equality as well as of expediency for devoting more attention and resources to rural development

pollution from the electric power sector in japan and efficient pollution reduction abstract under the scheme of the kyoto protocol there are plans for the efficient reduction of carbon dioxide emissions in the electric power sector nuclear power generation which emits no carbon dioxide in the process of generating electricity has come under scrutiny however this energy produces a new environmental issue the disposal of radioactive waste first we derive shadow prices of carbon dioxide and low level waste as marginal abatement costs in the case of the electric power sector in japan employing a directional output distance function it is found that the shadow prices are us 39 per tonne for carbon dioxide and us 1531 per liter for low level waste secondly we calculate the indirect morishima elasticity between carbon dioxide and low level waste in order to identify their substitutability and it is found that the substitution of low level waste for carbon dioxide is easier than the reverse this result suggests that with the amount of generated electricity fixed carbon dioxide can be substituted more easily by low level waste when the relative price of carbon dioxide increases for example as a result of implementation of a carbon dioxide tax or an emissions trading system

the estimation of welfare levels of a cardinal utility function in order to measure an individual s welfare function of income wfi van praag 1968 1971 the individual is confronted with various welfare levels and asked to associate income levels with them the welfare levels are given as verbal qualifications like good sufficient bad etc it is assumed that these verbal qualifications correspond to intervals of equal length of the range of the wfi here we want to test this assumption a first principal component model is applied the intervals of the range of the wfi associated with the verbal qualifications are estimated and a test of their equality is performed

cross subsidy in electricity tariffs evidence from india the recent reforms in india have been equated to the reduction of cross subsidization in electricity tariffs examining the usefulness of cross subsidies in electricity tariffs in india i have argued that they are prone to considerable inefficiencies and should be discontinued i have also formally examined the viability of above cost tariffs in the industrial sector to allow subsidized domestic and agricultural consumption finally i have used data from a distribution company in the state of uttar pradesh india to estimate industrial demand for electricity and have found that the policy of cross subsidy may have indeed gone overboard in india

on interpreting inverse demand systems a primal comparison of scale flexibilities and income elasticities scale flexibilities in inverse demand systems describe how marginal valuations change with expansions in the consumption bundle such effects clearly are related to income elasticities in direct demand systems however the connection is not so close as it first appears we argue that the link between scale flexibilities and income elasticities is tight only if preferences are homothetic a situation where neither measure is interesting or if all elasticities of substitution are unitary we make clear the relationship between the two measures in a coordinate system focusing on how marginal rates of substitution change with consumption scale and proportion

estimates of energy subsidies in china and impact of energy subsidy reform abstract for a transitional economy such as china some energy subsidies are reasonable and sometimes even necessary for achieving social goals however with rising energy prices and environmental concerns we see conflicts emerging between energy subsidies energy demand supply fundamentals and climate change considerations energy subsidies have important implications for sustainable development through their effects on energy use efficiency and the choice of fuel source this paper applies the price gap approach to estimate china s energy subsidies results indicate that china s energy subsidies amounted to cny 356 73 billion in 2007 equivalent to 1 43 of gdp subsidies for oil products consumption are the largest followed by subsidies for the electricity and coal sectors furthermore a cge model is used to analyze the economic impacts of energy subsidy reforms our findings show that removing energy subsidies will result in a significant fall in energy demand and emissions but will have negative impacts on macroeconomic variables we conclude that offsetting policies could be adopted such that certain shares of these subsidies are reallocated to support other sustainable development measures which could lead to reducing energy intensity and favoring the environment

capacity utilization measures underlying economic theory and an alternative approach measures of industrial capacity utilization hereafter cu have been used extensively in helping to explain changes in the rate of investment labor productivity and inflation the cu measures have also been used to obtain indices of capital in use as distinct from capital stock in place a number of alternative measures of cu are periodically calculated and published the 1980 economic report of the president for example contains three series that by the federal reserve board the u s department of commerce bureau of economic analysis and the wharton school of finance other publicly available series are those prepared by mcgraw hill publishing company the u s department of commerce bureau of the census and rinfret boston associates inc although a host of cu measures is publicly available it is not at all clear how one should interpret changes over time in each measure or variations among them a principal reason underlying these interpretation problems is that the crucial link between underlying economic theory and the constructed measure of cu is weak one way in which this issue has manifested itself in the policy domain over the last five years has been with respect to the uncertain effects of dramatic increases in energy prices on capacity output and on cu each of the cu measures noted above is computed in such a way that explicitly ignores any role for energy prices yet several times during the last decade though growth to apparently high rates of cu had taken place investment and average labor productivity were much lower than expected and the rate of price increase much greater in brief during the last decade the explanatory power of alternative cu measures has dropped sharply some have conjectured that post opec energy price increases may have brought about major changes in the u s economy so that old quantitative relationships between measured cu and investment labor productivity and price inflation may have been altered substantially in order to assess effects of changes in pe on cu a re examination of the notion and measurement of cu is needed based on the framework of the economic theory of the firm that is the focus of this paper

a dynamic analysis of japanese energy policies their impact on fuel switching and conservation abstract in 1973 the japanese economy was highly dependent on imported oil after the 1973 oil price shock vigorous policy action was undertaken by the japanese government in an attempt to reduce japan s energy consumption and in particular its dependence on imported oil this study attempts to determine how flexibly the japanese economy has responded to the dramatic changes in relative and absolute fuel prices which occurred since 1973 and to what extent government energy policies may have reinforced or undermined market signals and facilitated fuel switching and conservation to analyse the price and income elasticities of energy component demand a dynamic approach to energy demand modelling is employed the study reveals that japanese energy users have responded quite flexibly to the two major oil price rises in the 1970s the probable impact of energy policies on this response is however somewhat problematic

elasticity of substitution in a regulated firm abstract we derive the analogue of the morishima elasticity of substitution for a regulated firm and show that it is simpler yet more informative than the corresponding analogue of the allen uzawa elasticity derived by v k smith

a semi nonparametric approach to the demand for uk monetary assets we estimate an asymptotically ideal model of the demand for uk personal sector monetary assets we use data that are consistent with utility maximizing behaviour and find that uk monetary assets are generally substitutes in use the estimated elasticities of substitution during the 1980s and the early 1990s indicate that a relatively broad monetary aggregate should be used in economic studies the results also suggest that any policy based on interest or user cost elasticities of substitution between financial assets should be based on the morishima elasticities as the allen uzawa calculation can give misleading results

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

marginal abatement costs of carbon dioxide emissions in china a parametric analysis this paper investigates the technical inefficiency shadow price and substitution elasticity of hbox co 2 emissions of china based on a provincial panel for 2001 2010 using linear programming to calculate a quadratic parameterized directional output distance function we show that china s technical inefficiency increases over the period implying further scope for hbox co 2 emissions reduction in the medium and longer term at best by 4 5 and 4 9 respectively our results notwithstanding regional differences highlight increases in the shadow price of hbox co 2 abatement 1 000 yuan ton in 2001 to 2 100 yuan ton in 2010 additionally increasingly steep substitution elasticity highlights the difficult reality of reducing china s hbox co 2 emissions

the demand for electricity in the gcc countries abstract cointegration techniques are used to study the effects of economic variables on electricity demand in the gcc countries a dynamic model is estimated using aggregate data for the six states spanning the period 1970 97 statistical investigations confirm the existence of unit root in all time series employed in the study which called for the use of cointegration and error correction methodologies empirical results indicate that both income and price have an impact on electricity consumption and income and price policies could be effectively facilitated in electricity demand management

the incidence of indirect taxes on low income households in jamaica it is generally understood that the main concern of tax policy in developing countries with respect to the poor is that the poor not be made poorer the usual aim of tax reformers is thus either to avoid regressivity in tax design or to reduce regressivity through tax reform measures more positive actions to reduce poverty are it is usually argued best left to government expenditure policies in recent years however skepticism has grown as to the effectiveness of conventional public expenditure policy in reaching the very poor 2 in addition the potential scope for tax policy to affect factor prices and hence income distribution in developing countries has been stressed 3 the distributional effects of taxes thus continue to be of interest in most developing countries in the developed countries advances in modeling the effects of taxation have shed light on the complex relationships between taxation and income distribution and new approaches to incidence analysis have cast doubt on the earlier consensus as to the relative regressivity of various taxes 4 a few applications of these new ideas and techniques to developing countries are now available 5 in this article we contribute to this literature by making use of a new data set to analyze the incidence of indirect taxes on the poor in jamaica a decade ago a comprehensive review of fiscal incidence studies concluded that in only two of the 44 studies examined covering 22 developing countries was the tax system basically regressive that is in only two countries did the poor broadly defined appear to pay a larger proportion of their incomes in tax than did the rich 6 in a number of other cases however there was evidence of some regressivity to

an empirical comparison of flexible demand system functional forms this paper compares the performance of eight frequently used flexible forms that are either 1 locally flexible 2 effectively globally regular or 3 asymptotically globally flexible results show that the functions with global properties generally perform better particularly those models having asymptotic properties results using us consumption data indicate substitutability among the components of consumption at most data points there is also some interesting substitution volatility around the time of recessions in the usa copyright 2001 john wiley sons ltd

margins of multinational labor substitution multinational labor demand responds to wage differentials at the extensive margin when a multinational enterprise mne expands into foreign locations and at the intensive margin when an mne operates existing affiliates across locations we derive conditions for parametric and nonparamtric identification of an mne model to infer elasticities of labor substitution at both margins controlling for location selectivity prior studies rarely found foreign wages or operations to affect employment our strategy detects salient adjustments for german mnes with a one percent increase in german wages german mnes add 2 000 manufacturing jobs in eastern europe at the extensive margins and 4 000 jobs overall a converse one percent drop in eastern european wages is associated with an overall withdrawal of 730 mne jobs from germany

a test for cross subsidies in local telephone rates do business customers subsidize residential customers recent regulatory and technological changes suggest that the local telecommunications market may soon present opportunities for profitable entry bypass activity by businesses combined with the generally higher business rates suggests that business service revenues may be subsidizing residential access to the local network before regulators allow wide scale entry into local telecommunications they need to know if local phone service rates exhibit cross subsidies using data supplied by new england telephone this article tests a new set of sufficient conditions for cross subsidization that do not require observations on stand alone cost the results indicate that business service revenues subsidize residential service provision at nearly 65 of the suburban central offices the sufficient conditions for a residential to business cross subsidy fail for all central offices in the sample

short and long run elasticities in us residential electricity demand a co integration approach abstract co integration techniques show promise in the analysis of short and long run effects of economic variables on energy use we use these techniques to develop an error correction model of annual us residential electricity demand we construct equipment stock indices and estimate the model for 1949 1993 our analysis suggests a structural shift in consumption during the 1960s we discuss reasons for this shift report the short and long run elasticities provide forecasts for 1994 1995 and compare the model s forecasts with other published forecasts

fiscal stress and the production of public safety a distance function approach abstract faced with increasing crime rates but nonincreasing budgets local governments are seeking cost saving means of providing public safety this paper investigates a bureaucracy s response to fiscal stress as well as its ability to efficiently substitute civilian for uniformed personnel exploiting duality theory a distance function is used to model technology retrieve information concerning substitutability and shadow prices of personnel and test for cost minimization morishima elasticities are adopted to allow for asymmetry in substitution between types of personnel it is found that the more adverse the public safety environment and budgetary condition the more efficiently resources are allocated

derivation of the hicks or direct elasticity of substitution using the input distance function abstract i derive a new symmetric elasticity of complementarity from the input distance function by imposing a constant distance condition assuming technical efficiency and a single output the hicks elasticity of substitution is its reciprocal

productivity change and dynamic comparative advantage this paper proposes a simple decomposition of the widely used drc measure of international competitiveness into three distinct elements 1 changes in international prices 2 changes in production techniques and 3 total factor productivity change the decomposition provides a clear analytical link between two largely separate methodologies for assessing economic performance cost benefit indicators based on the world price rule and total factor productivity analysis the methodology is applied to evaluate changes in measured comparative advantage of industries in thailand for the period 1963 76 the results broadly indicate that changes in price competitiveness and in total factor productivity are the major sources of changes in drc ratios for thai industries

an econometric estimation of hicksian and marshallian elasticities in indian manufacturing the knowledge of substitution possibilities between different factors of production is essential in evaluating the impact of public policies on productivity employment industrial growth and factor intensity since the advent of flexible functional forms in the early 1970s a large number of studies have estimated the ease of factor substitution however to date most of the empirical evidence on factor substitution is based on a cost function a drawback with the cost function

energy substitutability in transition agriculture estimates and implications for hungary subsidised energy prices in pre transition hungary had led to excessive energy intensity in the agricultural sector transition has resulted in steep input price increases in this study allen and morishima elasticities of substitution are estimated to study the effects of these price changes on energy use chemical input use capital formation and employment panel data methods generalised method of moments gmm and instrument exogeneity tests are used to specify and estimate technology and substitution elasticities results indicate that indirect price policy may be effective in controlling energy consumption the sustained increases in energy and chemical input prices have worked together to restrict energy and chemical input use and the substitutability between energy capital and labour has prevented the capital shrinkage and agricultural unemployment situations from being worse the hungarian push towards lower energy intensity may be best pursued through sustained energy price increases rather than capital subsidies

empirical assessment of energy price policies the case for cross price elasticities abstract evaluations of energy price policies are necessarily based on measures of the substitution of energy and non energy inputs facing a variety of substitution elasticities the central question arises which measure would be appropriate apparently for a long time this question has not been at issue allen s elasticities of substitution aes have been the most used measures in applied production analysis this paper s main contribution is an instructive survey of the origin of substitution measures and of the trinity of empirical substitution elasticities aes cross price elasticities and the morishima elasticities of substitution mes with particular emphasis on their interpretations and the perspectives that will be captured by these measures this survey clarifies why classical cross price elasticities are to be preferred for many practical purposes berndt and wood s rev econom stat 57 1975 259 frequently applied data set of us manufacturing is used to illustrate why assessments of energy price policies would be better based on cross price elasticities like the energy price elasticity of capital rather than on aes or mes

decomposing energy demand across briic countries energy plays an important role within the production technology of fast emerging economies such that firms reaction to changes in energy prices provides useful information on factor productivity and factor intensity as well as the likely outcome of energy policy initiatives among other things drawing on duality theory this paper decomposes changes in energy demand into substitution and output effects using annual sector level production data for brazil russia india indonesia and china briic for the period 1995 2009 unlike previous studies this study analyzed the economic properties of the underlying production technology results indicate that changes in energy demand are strongly dominated by substitution effects more importantly an intriguing finding that emerges from our analysis is the role of economies of scale and factor accumulation as opposed to technical progress in giving rise to the growth performance of sampled economies

measuring the energy input substitution and output effects of energy price changes and the implications for the environment abstract previous studies of decomposition of factor inputs have limited their analysis on the estimation of substitution and output effects however this paper develops a two step approach to estimate the substitution and output effects of changes in energy demand resulting from changes in prices and further examines the implications of these effects on co2 emissions using european industrial dataset over the period 1995 2007 in our empirical estimations instead of relying only on isur model like previous studies we introduced a multilevel model which is a more befitting model to our data our analysis covers industry as a whole and for different sector types the primary results emerged from our analysis suggest a strong evidence using the multilevel model generally our results show that production inputs are substitutable we find the substitution and output effects to be negatively related to co2 emissions however the substitution effects dominate from policy perspectives our results suggest that output adjustments may not play a significant role in reducing emissions we find the overall effects of changes in energy demand to be moderate then we argue that increment in energy taxes should be complemented by cleaner factor substitution and sustainable growth to achieve a desirable carbon reduction

elasticities of electricity demand in india abstract the paper examines econometric relationship between electricity consumption and variables like income price of electricity and diesel used in for captive power generation to meet the shortages and reliability of power supply from utilities in five major consumer categories in india these categories are residential commercial agriculture small and medium industries and large industries income and price elasticities of electricity consumption are estimated at the national level for these consumers by pooling data across 19 states spread over 9 years 1985 86 1993 94 the results show that electricity consumption in commercial and large industrial sectors are income elastic 1 while residential agricultural and small and medium industries are income inelastic

electricity substitution some local industrial evidence substitution elasticities between electricity production and non production labor and capital in alabama s textiles paper chemicals and primary metals industries are estimated there is generally weak substitution between inputs and declining shares of production labor textiles exhibit a trend toward more capital intensive techniques all outputs are biased away from electricity electricity demand is price inelastic which implies regulatory constraints are binding

the estimation of the quantities in the ieq regression abstract the maintained hypothesis that the evaluation question in the measurement of individual welfare functions is answered according to equal intervals of the 0 1 scale is tested under the assumption that the welfare function can be approximated by a lognormal distribution function the quantiles corresponding to the intervals are estimated jointly with the individual parameters of the welfare function the estimation results for the quantiles reject the equal interval hypothesis

factor substitution and procurement competition for forest resources in sweden the utilisation of forest resources in the energy sector has been increasing partly caused by economic policies introduced to reduce the emission of greenhouse gases this in turn has led to an in

norwegian residential electricity demand a microeconomic assessment of the growth from 1976 to 1993 abstract the norwegian residential electricity consumption increased by an average of 3 annually during the period 1976 1993 political signals indicate that the growth in norwegian residential energy consumption should be reduced and that it may be necessary to increase energy taxes based on data for the sample of households from the annual consumer expenditure survey we study factors that are of importance explaining the growth in norwegian residential electricity demand during this period nearly half of the growth is due to an increase in the number of households while the rest reflects an increase in average consumption per household the increase in average consumption per household is due to an increasing number of households possessing electric household appliances such as dryers and dishwashers an increase in real disposable household income and in the floor space of dwellings

a new look at indirect taxation in developing countries abstract this paper reconsiders some of the traditional arguments made against indirect taxes on consumption such taxes despite the extensive criticism to which they have been subjected in the academic literature remain the mainstay of public finance in most developing countries and are likely to continue to do so brief discussions of the design of excise taxes and the incidence of indirect taxes on the poor illustrate the sorts of issues where more detailed tax specific and country specific research is needed to replace conventional generalizations about the effects of indirect taxes

the effects of an increase in power rate on energy demand and output price in korean manufacturing sectors in korea price subsidies for industrial power are provided by the government in order to enhance industrial competitiveness and curb inflation however this repeatedly causes electricity shortages in the peak summer and winter seasons because of over consumption forcing a decline in the demand for electricity by raising power rates would thus help prevent a national blackout lowering dependence on foreign energy and reducing co2 emissions cost effectively this paper simulates the effects of a rise in power rate on demand for electricity and output price by estimating a restricted cost function in which the quantity of raw materials is set to its cost minimizing level jointly with an inverse supply relation for the top three electricity intensive manufacturing sectors the empirical results indicate that a 10 increase in electricity rate would result in 8 0 10 1 less demand across all three manufacturing sectors ceteris paribus the impact on output price is of little statistical significance in the basic metals sector while output price on average falls by 0 16 in the tv and communication equipment sector

a physical production function for the us economy this paper introduces and presents an estimate of a production function motivated by physics with labor and energy providing force to produce work the separate interactions of capital with labor and energy lead to reliable estimates for us output from 1951 to 2008 with fixed capital assets the labor force and total btu energy inputs underpaid energy has an output elasticity twice that of labor overpaid labor faces elastic own substitution while there is weak substitution for capital the policy implications of these properties are discussed

poverty and the measurement of individual welfare a review article this review of hagenaars the perception of poverty gives a lengthy presentation and evaluation of the leyden approach of measuring the individual welfare function of income the key feature of the approach is the claim that welfare can be measured on a 0 1 scale the review discusses the book s wealth of material on poverty in europe within this theoretical framework

fishing revenue productivity and product choice in the alaskan pollock fishery a key element in evaluating fishery management strategies is examining their effects on the economic performance of fishery participants yet nearly all empirical studies of fisheries focus exclusively on the amount of fish harvested the economic benefits derived from fish stocks involve the amount of revenue generated from fish processing which is linked to both the way fish are harvested and the products produced from the fish in this study we econometrically estimate a flexible revenue function for catcher processor vessels operating in the alaskan pollock fishery recognizing potential endogeneity and a variety of fishing inputs and conditions we find significant own price supply responses and product substitutability and enhanced revenues from increased fishing days and tow duration after a regulatory change introduced property rights through a new fishing cooperative we also find significant growth in economic productivity or higher revenues over time after controlling for observed productive factors and price changes which exceeds that attributable to increased harvest these patterns suggest that the move to rights based management has contributed significantly to economic performance in the pollock fishery

separability and capital aggregation in sectoral models of us production separability plays a fundamental role in applied studies of production inasmuch as it provides for consistent aggregation and allows multi stage estimation of models with many inputs this paper examines whether two types of capital structures and equipment are weakly separable from labour and energy and materials in sectoral models of us production and provides an assessment of the effects of maintaining capital separability the study focuses on the elasticity of substitution as a measure of input association and associated standard errors and confidence intervals based on bootstrapping elasticity estimates and tests indicate that capital separability is generally inconsistent with data representing sectoral us production elasticity sign however appears robust to capital aggregation and performs especially well as an indicator of input association

testing viability of cross subsidy using time variant price elasticities of industrial demand for electricity indian experience abstract indian electric tariffs are characterized by very high rates for industrial and commercial classes to permit subsidized electric consumption by residential and agricultural customers we investigate the viability of this policy using monthly data for 1997 2003 on electric consumption by a few large industrial customers under the aegis of a small distribution company in the state of uttar pradesh for a given price cost ratio it can be shown that if the cross subsidizing class electricity demand is sufficiently elastic increasing the class rates fail to recover incremental cross subsidy necessary to support additional revenues for subsidized classes this suboptimality is tested by individually estimating time variant price elasticities of demand for these industrial customers using box cox and linear regressions we find that at least for some of these customers cross subsidy was suboptimal prior to as late as october 2001 when rates were changed following reforms

morishima elasticities of substitution with nested production functions abstract nested multi stage production technologies are distinguished by two distinct types of substitution intraprocess and interprocess this paper develops morishima elasticity measures for each shows the relation between the morishima and allen uzawa substitution elasticities and applies the analysis to domestic content protection

what determines the elasticity of substitution between capital and labor a literature review this paper provides the first comprehensive review of the empirical and theoretical literature on the determinants of the elasticity of substitution between capital and labor our focus is on the two input constant elasticity of substitution ces production function we start by presenting four concise observations that summarize the empirical literature on the estimation of motivated by these observations the main part of this survey then focuses on potential determinants of capital labor substitution we first review several approaches to the microfoundation of production functions where the elasticity of substitution eos is treated as a purely technological parameter second we outline the construction of an aggregate elasticity of substitution aes in a multi sectoral framework and investigate its dependence on underlying intra and inter sectoral substitution third we discuss the influence of the institutional framework on the extent of factor substitution overall this survey highlights that the effective elasticity of substitution ees which is typically estimated in empirical studies is generally not an immutable deep parameter but depends on a multitude of technological non technological and institutional determinants based on these insights the final section identifies a number of potential empirical and theoretical avenues for future research

industrial companies demand for electricity evidence from a micropanel abstract the paper presents a micro econometric analysis of industrial companies demand for electricity previous studies on electricity consumption in the industrial sector have relied on aggregate data or cross section observations here we present an econometric study on electricity demand based on a panel of 2949 danish companies followed from 1983 to 1996 it is found that estimators of electricity demand that take account of the panel structure fixed effect models yield considerably lower price and production elasticities compared to estimators that do not like cross section models it is also investigated how various company characteristics like size type of industrial sub sector and electricity intensity in production influence price and production elasticities it appears that companies with a high electricity intensity also have a high own price elasticity

is china s electricity price cross subsidy policy reasonable comparative analysis of eastern central and western regions abstract proper handling of the electricity price cross subsidy is the key to reducing the power cost of industrial and commercial users and is also the key task of china s new round of power system reform first this paper analyzes the development history of china s electricity price policy and describes the problems faced by the government at different stages second a cross subsidy calculation model is established and a method for calculating the scale and degree of cross subsidy is proposed third the concept of reasonable cross subsidy is defined and a method for calculating the reasonable cross subsidy ratio is proposed finally jiangsu henan and qinghai provinces are selected as representatives of the eastern central and western regions of china to analyze whether the current china cross subsidy policy is reasonable the results show that compared with the economically underdeveloped provinces of henan and qinghai in jiangsu province where the economy is more developed the residential and agricultural users have higher levels of cross subsidy but the ratio of reasonable cross subsidy is lower this shows that there is an unreasonable situation in china s electricity price cross subsidy policy

combining performance measures to investigate capacity changes in fisheries the common fisheries policy cfp aims to achieve a balance between the european fleet capacity and the resources available this can be realized either by temporarily reducing the fishing effort i e capacity utilization or quotas in the hope of increasing the resources available or reducing the actual fishing capacity in both cases the relationship between effort indicators and capacity needs to be resolved in order for the manager to introduce the right interventions previous studies have estimated these relationships in multi species fisheries using either a multi output distance function approach dfa or with a second stage data envelopment analysis dea both approaches have advantages and disadvantages in this article dea and dfa are combined to reduce noise in the estimation and to establish more useful interpretations for the manager the article compares the traditional dfa with the alternative approach for the danish north sea demersal trawlers the alternative approach improves the es

measurement of income inequality experimental test by questionnaire abstract we reconsider some of the basic assumptions of the literature on inequality analysis students views on the meaning of inequality comparisons were elicited by means of a questionnaire involving both numerical and verbal questions the responses suggest that two important axioms the principle of transfers and decomposability are not universally accepted

are risky assets substitutes for monetary assets i introduction financial innovation over the past couple of decades has enhanced the liquidity of many financial assets particularly noncapital certain risky assets further financial assets previously not regarded as monetary assets such as mutual funds and particularly money market mutual funds now provide monetary services such as liquidity and transactions services l given the increased liquidity of such funds the question arises as to whether risky assets are substitutes for capital certain monetary assets if noncapital certain assets are indeed substitutes for capital certain assets and are also being used for transactions purposes then agents may be treating risky assets as money although this issue has been addressed in the united states in the context of the addition of bond funds to m2 by for example duca 1995 no such research has yet been conducted in the united kingdom including risky assets in the analysis contradicts the work of ando and shell 1975 spencer 1986 appendix i pp 184 93 and spencer 1994 broadly they argue that since some nonrisky assets provide monetary services and probability also liquidity individuals would not hold risky assets for these purposes 2 in contrast hicks 1935 states that falling transaction costs and rising wealth encourages individuals to increase the proportion of risky assets in portfolio holdings most studies generally assume that risky assets fail to provide significant monetary services and for example have been excluded from the asset demand analysis of barr and cuthbertson 1991a drake fleissig and swofford 1997 and money demand studies such as taylor 1987 belongia and chrystal 1991 drake and chrystal 1994 and drake 1996 alternatively barr and cuthbertson 1991b use only risky assets in their asset demand system analysis the degree of substitution between risky assets and capital certain assets is an empirical issue while noncapital certain risky assets mutual funds and other financial assets may well be becoming closer substitutes for what people are using as money they are in no way perfect substitutes for the highly liquid cash assets to evaluate the role of noncapital certain assets we construct a noncapital certain risky divisia aggregate consisting of equities government bonds and unit trusts the divisia index allows for less than perfect substitution between assets and weights component assets according to their differing degrees of moneyness which may vary over time due to many factors for example financial innovation see barnett 1980 this methodology has been widely applied to monetary aggregation and money demand studies in a number of countries as in belongia 1996 drake 1996 drake and chrystal 1997 and anderson jones and nesmith 1997 to determine whether risky assets are substitutes for capital certain assets we use two other divisia aggregates constructed from traditional measures of money the first of these is an aggregate of highly liquid zero yield cash assets given that the component assets all have zero own rates of return however divisia aggregation is equivalent in this case to simple summation the second aggregate is a divisia aggregate of interest bearing capital certain assets including risky assets complicates the analysis because the degree of risk aversion will affect the estimates of substitution between capital certain and noncapital certain assets thus we also analyze how different degrees of risk aversion affect the results the substitution relationship between assets is estimated from an asymptotically ideal model aim the choice of an aim is in line with the recommendation of barnett fisher and serletis 1992 that flexible systems of demand equations should be used that allow for nonlinear optimizing behavior by economic agents furthermore this paper can be seen as an extension of the recent application of this model to u

subsidy policy and the enlargement of choice abstract development is the enlargement of people s choices optimal subsidy policy is intended to create the right incentives for each of the value chain participants this paper contends that the interest subsidy offered by the indian federal ministry of new and renewable energy for solar thermal systems through mainstream banking channels is superior in intent and outcome compared to the capital subsidy as currently offered for solar pv systems routed through government controlled delivery channels the interest subsidy enhances innovation improves service delivery and expands the range of product available to consumers enjoying a wide range of endowments thus leading to more inclusive development the simple monopoly model developed by atkinson atkinson ab capabilities exclusion and the supply of goods in basu k pattanaik p suzumura k editor choice welfare and development oxford university press 1995 is applied to the context of solar home systems to demonstrate price reduction and choice expansion in a liberalized market facilitated by an interest subsidy scheme

the demand for electricity in israel quarterly data for israel are used to compare and contrast three dynamic econometric methodologies for estimating the demand for electricity by households and industrial companies these are the dynamic regression model and two approaches to cointegration ols and maximum likelihood since we find evidence of seasonal unit roots in the data we also test for seasonal cointegration we find that the scale elasticities are similar in all three approaches but the ols price elasticities are considerably lower moreover ols suggests non cointegration the paper concludes by stochastically simulating the drms to calculate upside risk in electricity demand