investing in energy conservation are homeowners passing up high yields abstract energy conservation is examined as an investment option for homeowners conservation technologies produce monetary benefits through reduced fuel costs calculations suggest that many conservation measures have rates of return significantly higher than alternative investments in stocks bonds and real estate yet the level of conservation activity is inconsistent with these high yields several barriers exist which inhibit investments in conservation it is perceived as risky and the cost of obtaining reliable information is high public policies to encourage conservation should focus on reducing the risk of purchasing energy saving devices by improving the accuracy of energy savings estimates

exploring the potential for energy conservation in french households through hybrid modeling although the building sector is recognized as having major potential for energy conservation and carbon dioxide emissions mitigation conventional bottom up and top down models are limited in their ability to capture the complex economic and technological dynamics of the sector this paper introduces a hybrid framework developed to assess future household energy demand in france res irf a bottom up module of energy consumption for space heating has several distinctive features i a clear separation between energy efficiency i e investment in energy efficient technologies and sufficiency i e changes in the utilization of energy consuming durables which allows the rebound effect to be assessed ii the inclusion of barriers to energy efficiency in the form of intangible costs consumer heterogeneity parameters and the learning by doing process iii an endogenous determination of retrofitting which represents trade offs between retrofit quantity and quality subsequently res irf is linked to the imaclim r computable general equilibrium model this exercise shows that compared to a 37 reduction in final energy demand achievable in business as usual in existing dwellings an additional reduction of 14 could be achieved if relevant barriers to efficiency and sufficiency were overcome

spatial and economic patterns in life expectancy among us states this study investigates the determinants of gender specific life expectancy across us states over the period 1995 2007 we employ a production function specification where life expectancy depends o

barriers to energy efficiency a comparison across the german commercial and services sector abstract based on a large sample for the german commercial and services sector this paper econometrically assesses the relevance of various types of barriers to energy efficiency at the sectoral level and across fifteen sub sectors the results at the level of entire sectors suggest that the lack of information about energy consumption patterns and about energy efficiency measures lack of staff time priority setting within organizations and in particular the investor user dilemma are all relevant barriers allowing for sector specific differences in the relevance of these individual barriers yields a more heterogeneous picture the numbers and types of relevant barriers vary across sub sectors and the majority of sub sectors are subject to relatively few barriers the statistically most significant barriers are found for the sub sector of public administrations these findings are robust independent of whether the definition of an organization s energy efficiency performance includes only measures that have actually been realized or also those that are being planned for planned projects however organizations appear to underestimate internal priority setting as a barrier to energy efficiency

the experience curve option value and the energy paradox abstract this paper develops a model to explain the energy paradox the inclination of households and firms to require very high internal rates of return in order to make energy saving investments the model abstracts from many features of such investments to focus on their irreversibility the uncertainty of their future payoff streams and the investor s anticipation of future technological advance in this setting the decision to invest in energy saving technology can be delayed providing option value in addition delay allows the potential investor to cash in on future experience curve effects with the passage of time firms gain practical knowledge in producing and installing the energy saving technology enabling them to reduce the technology s up front cost per unit of energy saved we incorporate these fundamentals into a stochastic model where the investment s discounted benefits follow geometric brownian motion to demonstrate the model s capabilities we generate simulation results for photovoltaic systems that highlight the experience curve effect as a fundamental reason why households and firms delay making energy saving investments until internal rates of return exceed values of 50 and higher consistent with observations in the economics literature we also explore altruistic motivations for energy conservation and the model s implications for both additionality and the design of energy conservation policy

local labour control regimes uneven development and the social regulation of production jonas a e g 1996 local labour control regimes uneven development and the social regulation of production reg studies 30 323 338 the apparent demise of fordist consensus seeking institutions of labour regulation raises questions concerning which if any forms of labour market governance will dominate localities in the future without providing the answers for these questions this paper addresses at a theoretical level the social need for capital to foster reciprocities between places of production and sites of consumption and labour reproduction in local labour markets this need emerges from a contradiction between on the one hand capital s abstract interest in the global exchange of labour power and on the other hand the concrete interest of particular capitals in the local context of that exchange a local labour control regime amounts to a stable local institutional framework for accumulation and labour regulation constructed around local labour market reciprocities different factions

does the energy efficiency paradox exist technological progress and uncertainty we explain why firms may choose not to undertake investments inenergy saving technologies that appear profitable from a net presentvalue perspective as future technological advances are inherentlyuncertain and investments in new technology are at least partly irreversible it may pay to postpone investments in energy savingand wait for the arrival of improved varieties this insight casts doubton the existence of so called low hanging fruits in energy saving although we do not wish to deny that organisational failures may alsobe important failure to appreciate the underlying stochasticity oftechnological progress may obscure the insight that there is value inwaiting and costs involved in terminating the option to invest theappetite for low hanging fruits will be less when these costs areincorporated in the analysis we demonstrate that the effect of thearrival rate of new technologies on the adoption lag for a rational firmis ambiguous the same holds for the effect of the expected jump inefficiency of new technologies government policies aimed at enhancingthe adoption of new technologies through stimulation of r d maytherefore be counterproductive

technology adoption under uncertainty take up and subsequent investment in zambia technology adoption often requires multiple stages of investment as new information emerges agents may abandon a technology that was profitable in expectation we use a field experiment to vary t

beyond the stern review lessons from a risky venture at the limits of the cost benefit analysis this paper argues that debates amongst economists triggered by the stern review are partly relevant focusing on key parameters translating real ethical issues and partly misplaced in that they do not consider enough other determinants of climate change damages i the specifications of the utility function used for the assessments preference for the environment preference for smooth growth paths ii the interplay between uncertainty and the sequentiality of the decision and iii whether the growth engines behind the integrated assessment models can account for transient disequilibrium and sub optimality we derive some suggestions for any future research agenda in integrated assessment modelling whatever the position of the analysts about the relevance of the intertemporal optimisation framework and the bayesian approach to uncertainty in the climate affair

estimating dynamic demand for cigarettes using panel data the effects of bootlegging taxation and advertising reconsidered abstracct a dynamic demand for cigarette consumption is estimated using pooled data of 46 states over the period 1963 to 1980 a price elasticity of 0 2 and an insignificant income elasticity is found using pooled estimation techniques the bootlegging effect is modeled explicitly using neighboring price the effect is found to be significant two major policy issues are analyzed in light of these new estimates 1 cigarette taxation is found to be an effective tool for generating revenues even though there may be spillover effects to neighboring states where bootlegging is significant 2 the effects of the fairness doctrine act and the advertising ban on cigarette consumption are re examined we find mild support for the effectiveness of subsidized anti smoking messages in reducing cigarette consumption and no support for the thesis that the ban on advertising helps to increase per capita consumption

the energy efficiency paradox revisited through a partial observability approach the present paper examines the energy efficiency paradox demonstrated in greek manufacturing firms through a partial observability approach the data set used has resulted from a survey carried out among 161 energy saving technology firm adopters maximum likelihood estimates that arise from an incidental truncation model reveal that the adoption of the energy saving technologies is indeed strongly correlated to the returns of assets that are required in order to undertake the corresponding investments the source of the energy efficiency paradox lies within a wide range of factors policy schemes that aim to increase the adoption rate of energy saving technologies within the field of manufacturing are significantly affected by differences in the size of firms finally mixed policies seem to be more effective than policies that are only capital subsidy or regulation oriented

the impact of bse on the demand for beef and other meats in great britain indices of media coverage of bse are incorporated in a dynamic aids model of meat demand the publicity which bse has received is found to have had significant effects on the allocation of consumer expenditure among the meats a short run impact has been identified which accounts in large part for the discernible drop in the market share of beef in the early 1990s and more important there also appears to be a significant long run impact of bse which by the end of 1993 has reduced the beef market share by 4 5

the structure of energy efficiency investment in the uk households and its average monetary and environmental savings abstract socioeconomic and behavioural variables that influence the household s adoption of energy efficiency measures such as cavity and loft insulation and upgrades to the boiler are identified contrary to previous literature by extending brechling and smith s 1994 and hassett and metcalf s 1995 models it is shown that the application of the energy act 2011 which contains provisions on the green deal the new energy company obligation eco and the private rented sector needs to follow a tailored strategy to reach the low adoption households identified by my model moreover for the current adopters of the analysed measures average monetary and environmental adoption benefits are estimated based on parti and parti s 1980 demand model these estimates are smaller than their expected values showing an important energy efficiency gap in the sector particularly low cost measures can bring important savings that can help to meet the pay as you save rule i e the golden rule of the new regulation my model also shows that a poor state of dwelling repair can reduce the adoption benefits increasing the need of subsidies that will be financed through consumer s energy bills however this can increase the number of households in fuel poverty

is there an energy efficiency gap many analysts have argued that energy efficiency investments offer an enormous win win opportunity to both reduce negative externalities and save money this overview paper presents a simple model of investment in energy using capital stock with two types of market failures first uninternalized externalities from energy consumption and second forces such as imperfect information that cause consumers and firms not to exploit privately profitable energy efficiency investments the model clarifies that only if the second type of market failure cannot be addressed directly through mechanisms such as information provision energy efficiency subsidies and standards may be merited this chapter therefore reviews the empirical work on the magnitude of profitable unexploited energy efficiency investments a literature which frequently does not meet modern standards for credibly estimating the net present value of energy cost savings and often leaves other benefits and costs unmeasured these problems notwithstanding recent empirical work in a variety of contexts implies that on average the magnitude of profitable unexploited investment opportunities is much smaller than engineering accounting studies suggest finally there is tremendous opportunity and need for policy relevant research that utilizes randomized controlled trials and quasi experimental techniques to estimate the returns to energy efficiency investments and the welfare effects of energy efficiency programs

beyond case studies barriers to energy efficiency in commerce and the services sector to assess the empirical relevance of various barriers to the diffusion of energy efficient measures we conduct econometric analyses for 19 sub sectors in the german commercial and services sectors results from estimating a separate logit model for each sub sector suggest that the most important barriers are the investor user dilemma and the lack of information about energy consumption patterns typically multiple types of barriers are found to be statistically significant but they vary considerably across sub sectors finally we discuss policy implications for the most relevant barriers

the effects of price and smoking risk information on the demand for tobacco in taiwan an empirical study this study evaluates the effects of a cigarette price increase and smoking risk information on tobacco consumption in taiwan tobacco price expenditure and an index of smoking risk information for taiwan were introduced into a central bureau of statistics cbs demand model to estimate several cigarette demand elasticity coefficients according to this model increasing the cigarette price is a more effective means of reducing cigarette consumption than disseminating more risk information in addition we found that a price rise of nt 5 per cigarette pack would cause a reduction in the consumption of domestic and imported cigarettes of 3 23 and 4 86 packs per capita respectively total per capita consumption of cigarettes would be reduced annually by 8 09 packs 7 56 despite this reduction in cigarette consumption the increase in cigarette price would at the same time lead to a significant net increase in tax revenue to the taiwan government

uneven reserves geographies of banking trade unionism wills j 1996 uneven reserves geographies of banking trade unionism reg studies 30 359 372 this paper explores the geography of trade union organization in the retail banking sector spatial variations in union membership and the reasons for these differences are excavated using empirical material collected in two high street banks in welwyn garden city hertfordshire and warrington cheshire during 1993 despite the fact that workers in both locations were employed in the same institutions with the same nationally negotiated terms and conditions the banking insurance and finance union bifu was found to be more strongly implanted in the northern than in the southern location moreover contrary to the expectations of some commentators and scholars the enormous changes which are occurring in retail banking employment did not appear to be undermining these geographical variations workplace trade union cultures were found to persist reflecting different local histories of union organization

the misuse of net present value in energy efficiency standards abstract consumers are often blamed for not making necessary investments in energy efficient durables despite that these investments have positive net present value npv several papers have argued that when investments have option like characteristics e g irreversibility uncertainty flexible timing and lumpiness the aphorism invest if the net present value of investing exceeds zero isn t the best advice yet curiously the department of energy doe in the united states proposes new regulations mandating higher energy efficiency standards for consumer durables on the basis of non negative npv over an investment s lifetime in this paper we provide a step by step deconstruction of doe s npv methodology and show that doe s method purges volatility volatility persistence and nonstationarity that are otherwise present in energy prices as a result doe s projections of future energy prices are artificially smooth and statistically biased casting serious doubt on the reliability of the magnitude of energy savings from energy efficient durables

energy burden alleviation and greenhouse gas emissions reduction can we reach two objectives with one policy in this article we assess french current public policies designed to reduce greenhouse gas ghg emissions and abate household energy burden through a simulation of changes in residential sector characteristics over the long run we build on an existing partial equilibrium model to take into consideration key determinants of excessive energy burden among vulnerable households this analysis reveals that current public policies are not sufficient to reach the ambitious objectives for reducing energy consumption and ghg emissions in france moreover the decreases that might occur mask significant social disparities across households the joint implementation of multiple instruments leads to interactions that diminish overall policy outcomes overall current public policies produce estimated free riding rates of 75 energy efficiency measures are thus insufficient in themselves the government should focus more on monetary poverty as a cause of low home improvement rates and consider subsidizing renovation costs as a potential solution

energy conservation investment do consumers discount the future correctly we argue that the apparently high discount rates attributed to investors making energy conservation investments are not irrational or the result of some market failure rather they may result from an investor recognizing that many conservation investments entail substantial sunk costs in the presence of these costs and uncertainty over future conservation savings consumers should use a higher hurdle rate for investment than if there were no uncertainty simulations suggest that the hurdle rate should be about four times greater than the standard rate an implication of our model is that tax subsidies for the purchase of conservation capital are likely to be ineffective we discuss alternative policy approaches which are more likely to increase energy efficient investment namely mandatory efficiency standards and energy taxes

subjective discount rates in the general population and their predictive power for energy saving behavior why do people sometimes refrain from saving energy even if it would pay off in monetary terms subjective discount rates present one possible explanation for this lack of foresight but little is known about their level and reliability in the general population with regard to behavior persons with lower discount rates are expected to accept additional costs upfront more readily than those with higher discount rates based on a representative nation wide study the swiss environmental survey 2007 and a follow up survey our analyses reveal that on average subjective discount rates are well above market interest rates and moderately stable over a time interval of four years income and education are negatively correlated with discount rates contrary to expectations we did not find convincing support for an impact of discount rates on energy saving behavior

industrial districts old wine in new bottles harrison b 1992 industrial districts old wine in new bottles reg studies 26 469 483 according to the theory of industrial districts a new wave of economic growth is being led in a number of regions in europe north america and east asia by spatially concentrated networks of mostly small and medium sized enterprises often using flexible production technology and characterized by extensive local interfirm linkages does this amount to a re emergence of the dominance of what urban and regional economists call agglomeration economies over the well known pressures on business to spatially disperse its operations neoclassical economic theorizing from marshall to perroux provides one perspective on the contemporary industrial district phenomenon another is afforded by granovetter s more recent elaboration of the ideas of embedding under and over socialization confronting each of these theoretical approaches with the other leads me to conclude that the industrial district prototypes involv

the effectiveness of anti smoking legislation a review abstract this survey focuses on government efforts to curb the use of undesirable goods notably tobacco products we synthesize the economics literature and examine the effectiveness of government curbs on tobacco consumption through non price controls such as bans on cigarette advertising health warnings and workplace smoking bans and price measures or higher prices through higher taxes this literature review is unique in that we do not merely aim to provide a summary of the literature rather our main focus is to draw conclusions from the literature regarding the effectiveness of alternate policy measures across countries in checking smoking and to provide directions suggestions for extending the scope of government intervention to other tobacco products

modeling energy technology choices which investment analysis tools are appropriate abstract a variety of tools from modern investment theory appear to hold promise for unraveling observed energy technology investment behavior that often appears anomalous when analyzed using traditional investment analysis methods this paper reviews the assumptions and important insights of the investment theories most commonly suggested as candidates for explaining the apparent energy technology investment paradox the applicability of each theory is considered in the light of important aspects of energy technology investment problems such as sunk costs uncertainty and imperfect information the theories addressed include the capital asset pricing model the arbitrage pricing theory and the theory of irreversible investment enhanced net present value methods are also considered the relevance of the capital asset pricing model and the arbitrage pricing theory given the special characteristics of energy technology investment decisions appears limited to the value of the theories conceptual insights in contrast the theory of irreversible investment and enhanced net present value are found to provide more useful modeling and analysis methods each capable of providing important insights into the energy technology investment paradox

aggregate cigarette demand and regional differences in china national educational level final consumption expenditure average propensity to cigarette consumption apcc and cigarette price are adopted to research the regional and national aggregate cigarette demand of china under the condition that the effects of anti smoking education in the chinese current educational system are not remarkable the theoretical model shows that cigarette demand will increase with the increase of national educational level empirical analysis points out that cigarette demand increases with the increase of educational level estimates also suggest that cigarette price consumption expenditure and apcc will affect cigarette demand significantly and that there are great differences for cigarette demand by region

the efficiency paradox bureaucratic and organizational barriers to profitable energy saving investments abstract the paradox of why profitable energy saving investments are not undertaken continues to provoke debate the underlying phenomenon might be called the efficiency paradox because it represents a case in which business firms which are often presumed or taken axiomatically to be economically efficient make decisions that do not maximize profits new data from one of the us environmental protection agency s voluntary pollution prevention programs enables this paradox to be explored statistically the data show that both the level and variation in returns to lighting upgrade investments cannot be explained by standard economic models substantial gains in energy efficiency can be achieved without sacrificing profitability both economic and organizational factors account for some of the variation in observed returns to these investments but the results suggest a need for improved and more comprehensive theories of the investment behavior of firms and other organizations

making enduring choices uncertainty and public policy abstract this paper provides an experimental test of the theory of investment under uncertainty and applies the theory to a group of policy decisions investment under uncertainty describes a class of problems characterized by uncertainty that resolves itself over time sunk costs that cannot be fully recovered and the ability of the decision maker to wait without loss of strategic advantage it also implies a bad news principle under which decision makers are motivated by expected costs but not expected benefits the theory is illustrated as a two period model for which the decision maker can either invest in the first period and receive a known current return plus an uncertain future return or defer until the second period when uncertainty is resolved by foregoing current period benefits a cost that is sometimes referred to as an option value is incurred parameter values are specified and an experimental test the results of which closely track the predictions of the theory is described three cases the structuring of contingent valuation questionnaires the operalization of the precautionary principle in risk analysis and the development of public policy to stimulate private investments as for energy saving products are used to illustrate potential public policy applications

industrial districts and regional economic development a regulation approach digiovanna s 1996 industrial districts and regional economic developoment a regulation approach reg studies 30 373 386 this paper examines the regulatory underpinnings of industrial districts as many regional governments have been forced to accept greater responsibility for their own economic futures the industrial district model has been presented as an attractive path to economic development the underlying assumption among many policy makers is that all industrial districts are based on similar models of production organization and labour relations nevertheless the comparative approach illustrates that districts which appear similar on the surface are often quite distinct particularly when the experience of workers is considered by applying the concepts of regulation theory to the experiences of emilia romagna baden wurttemberg and silicon valley this paper illustrates that flexibly specialized districts can result in a variety of social outcomes this paper concludes that the success o

research on the energy saving and revenue sharing strategy of escos under the uncertainty of the value of energy performance contracting projects abstract under the uncertainty of the value of energy performance contracting projects epcps this paper develops a revenue sharing bargaining model between an energy service company esco and an energy using organization eu based on the model the paper analyzes the impacts of energy prices risk adjusted discount rates and accidents on the esco s bargaining strategies the research shows that the greater the probability of adverse circumstances is the higher is the revenue share of the eu and the more disadvantageous is the esco s position in the game furthermore we design a forecast commitment contract between an esco and an eu and analyze the optimal product s energy savings commitment strategy of the esco to cope with uncertain energy savings and contract risk the research illustrates that by introducing penalties and commitments the contract can eliminate the impact of the uncertain energy savings on the contract execution to a certain extent when the eu takes a greater commitment risk the esco is willing to provide a higher commitment thus enhancing the strategy value of the bilateral relationship and reducing the contract risk finally the policy recommendations about improving shared savings contract standard third party energy savings measurement and verification mechanism and arbitration mechanism of epcs are provided

making the implicit explicit a look inside the implicit discount rate implicit discount rates idrs are employed in energy models to capture household investment decisions yet the factors behind the idr and their respective implications for policy making usually remain blurred and fractional the proposed comprehensive framework distinguishes three broad categories of factors underlying the idr for household adoption of energy efficient technologies eets preferences notably over time risk loss debt and the environment predictable ir rational behavior bounded rationality rational inattention behavioral biases and external barriers to energy efficiency existing empirical findings suggest that the factors underlying the idrs that differ across household characteristics and technologies should be accounted for in energy models furthermore the framework allows for a fresh look at the interplay of idrs and policies we argue that a simple observation of high idrs or observing correlations between idrs and socio economic characteristics does not provide guidance for policy making since the underlying sources cannot be identified instead we propose that some of the factors underlying the idr notably external barriers can be changed through directed policy interventions whereas other factors notably preferences and predictable ir rational behavior are innate and can only be taken into account through reactive policy interventions

promoting clean energy investment an empirical analysis of property assessed clean energy abstract from 2008 to 2010 a handful of property assessed clean energy pace programs offered property secured loans to homeowners for residential clean energy investments this analysis uses difference in differences models and synthetic counterfactual models to estimate the effect of three california pace programs on residential photovoltaic installations while pace programs do not offer superior terms to other solar financing options we find that pace financing increases solar installations by approximately 3 8 watts per owner occupied household per quarter a 108 increase over the mean watts per owner occupied household

demand side management overcoming market barriers or obscuring real costs abstract this paper compares two approaches to estimating the net benefits of a demand side management program that subsidizes the purchase of efficient equipment the total resource cost trc test suggests net benefits of us 6 9 million estimates based on consumer s surplus yield an estimated net loss of us 6 3 million this gap is due to differences in estimates of participants net benefits market failures do not appear to be significant and thus cannot explain much of the gap the more plausible explanation is that the trc uses a lower discount rate than participants use for themselves and it omits some costs

three reasons to use annual payments in contingent valuation surveys convergent validity discount rates and mental accounting abstract we present three arguments for using ongoing annual payments in contingent valuation cv surveys that estimate the benefit of a long lasting environmental improvement first by matching the duration of the payments with the duration of the environmental benefits survey respondents are spared from performing complicated present value calculations second willingness to pay wtp estimates from cv surveys that include ongoing annual payments best match wtp estimates obtained using travel cost surveys third respondents are less likely to face binding mental budget constraints with ongoing annual payments than with a larger one time payment in addition respondents discount rates may be estimated by collecting non hypothetical individual time preference data as part of the valuation survey

stages of the recruitment process and the referrer s performance effect although the existing theory predicts that a referral s chances of being hired increase with the job performance of the referrer no empirical evidence is available to support this claim to address this discrepancy we decompose the recruitment process into objective selection subjective selection and self selection and theorize that the likelihood of passing a particular recruitment stage increases with the performance of the referrer under objective selection and self selection but remains undetermined at a stage of subjective selection our analysis of unique comprehensive data on online recruitment of sales agents in a virtual call center supports these arguments the effectiveness of personnel as a recruitment channel varies with the type of the recruitment stage and performance of the referrer when the firm evaluates candidates by an objective criterion the advantage of a referral increases with the performance of his or her referrer those referred by relatively high performing workers are significantly better than the applicants who learned about the job from internet ads when job candidates self select into the next stage of the online application process the referral of any agent is more likely to continue than a nonreferral and this likelihood increases with the performance of the referrer on a subjective stage the outcome is contingent on the intricacies of the recruitment process in our case an applicant s chances of being hired increase with the performance of his or her referrer because the firm rejects the referrals of low performing workers at a higher rate than it does nonreferrals while it treats equally the referrals of high performing workers and nonreferrals the study s contributions to the literature on social networks in labor markets are discussed

factors influencing willingness to pay for the energy star label abstract in the united states nearly 17 of greenhouse gas emissions come from residential energy use increases in energy efficiency for the residential sector can generate significant energy savings and emissions reductions consumer labels such as the us environmental protection agency s energy star promote conservation by providing consumers with information on energy usage for household appliances this study examines how the energy star label affects consumer preferences for refrigerators the results of an online survey of a national sample of adults suggest that consumers are on average willing to pay an extra 249 82 349 30 for a refrigerator that has been awarded the energy star label furthermore the results provide evidence that respondent willingness to pay was motivated by both private energy cost savings and public environmental benefits

energy paradox and political intervention a stochastic model for the case of electrical equipments abstract this paper develops a model that explains the delay of decisions to adopt profitable energy saving investments this problem is known as the energy paradox the model rationalizes the profitability requirements raised by the irreversibility the uncertainty and the decrease of costs as a result of learning by doing in this context the wait gives investors more visibility and more lower investment costs which gives them an option value the representative agent has an interest to postpone its energy saving decision until future benefits increase and equalize its required option value formally we internalize these explanatory factors in a stochastic model where the updated energy saving benefits follows a geometric brownian motion to affirm the capacity of the model we generate simulation results for two equipments for electrical uses beyond that we extend the model to simulate the effects of energy policy instruments to promote adoption of such equipments simulations prove that the taxation of energy prices is likely to be more effective than the subsidy for energy saving equipments it is also found that the combination of these instruments amplifies the adoption of energy saving equipments and generates very favorable economic and environmental externalities

inducing investments and regulating externalities by command versus taxes a linear tax on an externality generating activity may not attain the first best social optimum the problem arises because a monopolist s gain from improving the characteristics of a product may differ from the social gain even when consumers are willing to pay for the change

investment in energy efficiency do the characteristics of firms matter the literature on energy efficiency provides numerous examples of apparently profitable technologies that are not universally adopted yet according to the standard neoclassical theory of investment profit maximizing firms should undertake all investments with a positive net present value the standard theory also holds that the discount rate for computing the present value of a project should be the return available on other projects in the same risk class and therefore should not depend on characteristics of the firm this model as applied to energy saving investments is tested by examining whether firms characteristics influence their decision to join the environmental protection agency s voluntary green lights program a discrete choice regression is estimated over a large sample of participating and nonparticipating firms missing values in the data matrix are replaced with multiple imputations from a distribution estimated using the expectation maximization algorithm the results show that 1 sub

smart meter devices and the effect of feedback on residential electricity consumption evidence from a natural experiment in northern ireland abstract using a unique set of data and exploiting a large scale natural experiment we estimate the effect of real time usage information on residential electricity consumption in northern ireland starting in april 2002 the utility replaced prepayment meters with advanced meters that allow the consumer to track usage in real time we rely on this event account for the endogeneity of price and payment plan with consumption through a plan selection correction term and find that the provision of information is associated with a decline in electricity consumption of 11 17 we find that the reduction is robust to different specifications selection bias correction methods and subsamples of the original data the advanced metering program delivers reasonably cost effective reductions in carbon dioxide emissions even under the most conservative usage reduction scenarios

cigarette demand health scares and education in turkey the purpose of this paper is to examine the demand characteristics of cigarettes in turkey aggregate time series date for the 1960 88 period are used in estimation income and price elasticities of cigarette demand are obtained the effect of health warning is estimated to reduce cigarette consumption by about 8 since the inception of warnings in 1982 imports of cigarettes have been allowed since 1984 in addition to advertising of cigarettes in the non electronic media the effect of health warnings are found to be stronger than the opposing effect of advertising the results also suggest that public education about adverse health effects of smoking may be more effective in reducing consumption and less regressive on consumer incomes than raising the price of cigarettes

the role of income in energy consumption behaviour evidence from french households data the main purpose of this paper is to characterise quantitatively the impact of income on household energy consumption in the residential and transport sectors starting from the data collected in a paper survey we analyse the extent of the constraint experienced by households in terms of equipment purchasing behaviour and daily energy consumption this analysis shows that the least well off households are particularly constrained since the share of their budget represented by these energy services is very large 15 25 and this corresponds to a level of energy service well below that of the better off households the case of space heating shows a factor of 2 in terms of level of comfort achieved between the extreme 10 percentiles these households also face a strong capital constraint for equipment purchases this leads either to a large increase in the required rate of return or to a reduction in the proportion of households that are prepared to replace their equipment earlier the least well off households are thus doubly constrained since it is more difficult for them to invest in our opinion it is crucial to take into account this observation in the context of political measures aimed at reducing households co2 emissions

demand for cigarettes a mixed binary ordered probit approach this study analyses the demand for cigarettes fitting observed zero outcomes with a trivariate model consisting of an equation for the starting smoking decision an equation for the quitting decision and an equation that models the level of cigarettes consumed five competing specifications are considered to explain level with the ordered probit which accommodates pile ups of counts in the dependent variable providing the best fit marginal effects of explanatory variables are calculated providing strong evidence of race and gender differences in consumption patterns the estimated marginal effects are robust to alternative categorizations of the level of cigarettes

regional income effects and renewable fuels increased usage of renewable energy sources in danish rural areas and its impact on regional incomes co2 emission is a worldwide problem and in the attempt to reduce these emissions renewable energy sources may be considered serious alternatives to the present usage of fossil fuels as part of a research programme financed by the danish energy agency data concerning the different heating technologies based on oil and wood fuels have been collected private and social costs are estimated and these economic data are used when analysing regional income effects of increased consumption of fuels e g wood locally produced the impacts on income and tax revenues are calculated from multiplier expressions constructed with rights to the measurement of local effects

energy efficiency economics and policy energy efficiency and conservation are major factors in the reduction of the environmental impact of the energy sector particularly with regard to climate change energy efficiency also contributes to reducing external dependence and vulnerabilities in the energy domain in this paper we discuss the factors that influence energy efficiency and conservation decisions and the most appropriate policies for their promotion although not all public policies seem justified we argue that specific policies for promoting energy conservation may be required preferably based on economic instruments or on the provision of information to consumers

a fresh meat almost ideal demand system incorporating negative tv press and advertising impact abstract this paper investigates fresh meat consumption in belgium during 1995 1998 through the specification of a three equation almost ideal demand system aids incorporating a media index of tv coverage and advertising expenditures as explanatory variables estimated parameters and elasticity coefficients are plausible and consistent with demand theory own price elasticities are relatively low indicating a low fresh meat demand sensitivity to price changes over this period which was dominated by mass media reports about the potential health risks associated with meat consumption the scope of the paper extends beyond the estimation of elasticity coefficients and includes the specification of a media index and simulations that provide insights into the impact of negative press relative to advertising efforts specifically the impact of television publicity is shown to have been particularly negative on beef veal expenditures in favour of pork mixture this finding corroborates expectations since mass media issues mainly pertained to bse mad cow disease and hormone residues during the investigated period with relatively little effort being undertaken and with its current strategy fresh meat advertising is found to have only a minor impact compared with negative press

why do some occupations pay more than others social closure and earnings inequality in the united states1 this article elaborates and evaluates the neo weberian notion of social closure to investigate positional inequality in the united states it argues that social and legal barriers around occupations raise the rewards of their members by restricting the labor supply enhancing diffuse demand channeling demand or signaling a particular quality of service hypotheses derived from the closure perspective are evaluated using new data that map five institutionalized closure devices licensing educational credentialing voluntary certification association representation and unionization onto 488 occupations results from multilevel models demonstrate that closure practices particularly those that generate tangible restrictions on the labor supply shape the contemporary structure of occupational earnings returns to these strategies vary across occupations but are not tightly linked to the complexity of the occupation s knowledge base if suitably elaborated closure theory thus offers a promising complemen

the effects of an anti smoking campaign on cigarette consumption empirical evidence from greece 1987 the effects of an anti smoking campaign on cigarette consumption empirical evidence from greece applied economics vol 19 no 3 pp 323 329

been top down so long it looks like bottom up to me abstract while technologists emphasize suboptimal choices by individuals and organizations many economists have ignored behavior exhibiting technical inefficiency this paper selectively discusses efforts by some economists to identify and measure technical inefficiency as applied to the energy efficiency gap bottom up economics would seek to measure significant departures from best practice technology distinguish between inefficiency that is more less wasteful of energy than other inputs and focus on developing testable hypotheses about technical inefficiency support for widespread intervention in energy use decisions may not necessarily follow from such an inquiry

the effect of advertising on total consumption of cigarettes in the u k a comment abstract the premise that there is a link between the volume of cigarette advertising and the total cigarette consumption is examined in this study with reference to two previous studies done by mcguinness and cowling and metra consulting group ltd the relationship between cigarette advertising and cigarette consumption was tested by using econometric and statistical methods the model tested had a reasonably high level of explanatory power in terms of accounting for changes in cigarette consumption over the studied period statistical analysis of the situation revealed a stable positive and significant relationship between sales and media advertising of cigarettes

do consumers discount the future correctly a market based valuation of residential fuel switching abstract dsm and energy efficiency options are generally evaluated using engineering oriented discounted cash flow procedures which value all cost and benefit streams using a single arbitrary discount rate usually the firm s weighted average cost of capital wacc the wacc based approach ignores financial risk and hence leads to unreliable results in a recent paper in this journal hassett and metcalf depart from this tradition they reflect financial risk by simulating the total variability of returns from energy saving investments their findings indicate that dsm projects are potentially risky suggesting that the net benefits must be discounted at significantly higher rates thus lowering their present values this paper presents a market based evaluation of a particular dsm option residential fuel switching using the capital asset pricing model capm under the capm approach a risk adjusted market based discount rate is estimated for each cost stream fuel maintenance and avoided outlays for electricity the market based results which reflect the systematic risk of each cost stream suggest that fuel switching is probably not cost effective because it is considerably more risky than indicated by a wacc based analysis this supports hassett and metcalf s conclusion that consumers who reject dsm projects are not necessarily acting irrationally

economics and rational conservation policy energy analysts have long been concerned with the apparently low level of energy efficient investments and have suggested the presence of various market barriers and failures that hinder investment the concept of a barrier as defined here is some force that is working against investment in energy efficient technologies market failures on the other hand are failures of the competitive paradigm that lead to economically inefficient outcomes market barriers require no particular response on the part of government while market failures may call for some policy response

how high are option values in energy efficiency investments high implicit discount rates in consumers energy efficiency investments have long been a source of controversy in several recent papers hassett and metcalf argue that the uncertainty and irreversibility attendant to such investments and the resulting option value account for this anomalously high implicit discounting using their model and data we show that to the contrary their analysis falls well short of providing an explanation of this pattern

emission permit banking pollution abatement and production inventory control of the firm abstract in this paper we present a dynamic model modified with emission permit banking and pollution abatement and investigate the effect of emission permit banking and pollution abatement on the production inventory strategy of the firm after introducing emission permit banking and pollution abatement the cost function consists of the inventory holding and production costs the cost of investment in abatement capital goods and the emission procurement selling cost furthermore the inventory holding costs are linear production costs are non decreasing and convex functions of the production level and the costs of investment in abatement capital goods are increasing and convex functions of the investment level we compare the optimal production inventory strategy before emission permit banking and pollution abatement and thereafter the mathematical investigation is based on the arrow karlin model

the role of risk and trust attitudes in explaining residential energy demand evidence from the united kingdom recent research into the determinants of household energy consumption has aimed to incorporate findings from economics sociology and psychology in order to obtain a more comprehensive understanding of the factors determining energy demand the current paper contributes to this nascent stream of literature by studying the relationship between risk attitudes trust propensity and energy consumption at the household level drawing on the british household panel survey a well known data set in the context of energy studies i show that trust is negatively correlated with household energy demand while higher risk tolerance leads to increases in residential energy use potential explanations for these findings are investigated suggesting that risk preferences may be related with overall appliance stock and the size of the rebound effect

kalman filter and the demand for cigarettes kalman filter estimates of price income and advertising elasticities are presented an analysis of structural change in the demand for cigarettes in the us for the period 1929 86 is made estimated price and income elasticities are generally smaller and the advertising elasticity larger than estimates previously found cigarette demand is inelastic with respect to price and income and advertising elasticity is statistically insignificant for the most part furthermore both income and price elasticities decline over time while advertising elasticity tends to rise four time periods where structural change has occurred are identified the health scare reports and the fairness doctrine act have a significant impact on per capita cigarette consumption

when the carrot goes bad the effect of solar rebate uncertainty abstract although meant to encourage investment in solar photovoltaic pv systems some incentive policies may themselves become a barrier in instances where policy related uncertainty is present as potential solar adopters delay their investment until uncertainty is resolved this study utilizes a quasi experimental setting to quantify the effect of solar policy uncertainty focusing on the california solar initiative s residential rebate program i exploit the temporary exhaustion of funds within one of the utility territories as an exogenous source of increased uncertainty and estimate that it leads to a 67 drop in rebate applications in an average zip code week there is considerable heterogeneity in this effect depending on household income and pv system size among households that are least likely to invest in pv without a rebate incentive program participation drops by up to 69 this suggests potentially significant loss in program effectiveness due to lower pv adoption and underscores the importance of accounting for uncertainty in policy evaluations

the stability of cigarette demand the relative effects of various governmental interventions upon cigarette consumption is important to policy makers historically the demand for cigarettes has been quite unstable previous studie

adoption of residential solar power under uncertainty implications for renewable energy incentives abstract many incentives at the state and federal level exist for household adoption of renewable energy like solar photovoltaic pv panels despite generous financial incentives the adoption rate is low we use the option value framework which takes into account the benefit of delaying investment in response to uncertainty to examine the decision by households to invest in solar pv using a simulation model we determine optimal adoption times critical values of discounted benefits and adoption rates over time for solar pv investments using data from massachusetts we find that the option value multiplier is 1 6 which implies that the discounted value of benefits from solar pv needs to exceed installation cost by 60 for investment to occur without any policies median adoption time is eight years longer under the option value decision rule compared to the net present value decision rule where households equate discounted benefits to installation cost rebates and other financial incentives decrease adoption time but their effect is attenuated if households apply the option value decision rule to solar pv investments results suggest that policies that reduce the uncertainty in returns from solar pv investments would be most effective at incentivizing adoption

survey evidence on the willingness of u s consumers to pay for automotive fuel economy abstract prospect theory holds that human beings faced with a risky bet will tend to value potential losses about twice as much as potential gains previous research has demonstrated that prospect theory could be sufficient to explain an energy paradox in the market for automotive fuel economy this paper analyzes data from questions added to four commercial multi client surveys of 1000 u s households each in 2004 2011 2012 and 2013 households were asked about willingness to pay for future fuel savings as well as the annual fuel savings necessary to justify a given upfront payment payback periods inferred from household responses are generally consistent over time and across different formulations of questions mean calculated payback periods are about 3 years but there is substantial dispersion among individual responses the calculated payback periods do not appear to be correlated with the attributes of respondents respondents were able to quantitatively describe their uncertainty about both vehicle fuel economy and future fuel prices simulation of loss averse behavior based on respondents stated uncertainty illustrates how loss aversion could lead consumers to substantially undervalue future fuel savings relative to their expected value

oil and energy price volatility it is commonly believed that since the 1973 oil crisis oil and energy prices have been more volatile than other commodity prices this study examines monthly producer prices for thousands of products over the period january 1945 through august 2005 the results show that crude oil refined petroleum and natural gas prices are more volatile than prices for about 95 of products sold by domestic producers relative to crude commodities however crude oil prices are currently more volatile than about 65 of other products and oil price volatility first exceeded the median for crude commodities following the 1986 drop in oil prices

driving forces of rapid co2 emissions growth a case of korea abstract this study aims to investigate korea s final demand structure and its impacts on co 2 emissions in order to reduce co 2 emissions and develop environmental policy directions based on the environmentally extended input output model this study adopts a two step approach 1 to estimate the embodied emissions and their intensities for 393 sectors induced by final demand and 2 to calculate the driving factors of emission growth between 2003 and 2011 and then evaluate the result by using structural decomposition analysis sda the findings of this study demonstrate that the impact of composition change in export with less embodied emission intensities tends to offset the increase in co 2 emission by the export scale growth the relatively low residential electricity price has resulted in the rapid growth of household electricity consumption and significantly contributed to emissions growth the result of sda indicates that korea s final demand behavior yielded high carbonization over the same period the findings suggest that korean government should promote exports in industries with less embedded co 2 in order to protect environments in addition emission information of each product and service should be provided for consumers to change their purchase patterns towards contributing to low carbon emissions as active players

are energy efficiency standards justified abstract this paper develops an analytical framework for comparing the welfare effects of energy efficiency standards and pricing policies for reducing gasoline electricity and nationwide carbon emissions the model is parameterized with us data and includes key externalities in the energy transportation sectors and possible underinvestment in energy efficiency due to misperceptions over energy savings even with large misperceptions the extra welfare gains from complementing efficient pricing policies with energy efficiency standards are zero for reducing gasoline and 5 percent for reducing electricity and when viewed as substitutes these standards forgo 60 percent or more of the potential welfare gains from corresponding pricing policies a combination of energy efficiency and emissions standards is more than three times as costly as carbon pricing when there is no misperception over energy savings and even with large misperceptions combining carbon pricing with gasoline electricity taxes is better than combining it with energy efficiency standards

tobacco consumption and taxation in italy an application of the quaids model estimates are presented of the demand for tobacco in italy in the context of a demand system approach the grouping of goods is based on varian s non parametric test for weak separability the parametric demand model is banks blundell and lewbel s quaids model which combines the empirical flexibility of quadratic logarithmic engel curves with integrability estimation is by iterative gmm procedure the estimates are used in an analysis of welfare improving tax reforms which incorporates distributional data the results are discussed with respect to the special features of the italian tobacco market

health scare excise taxes and advertising ban in the cigarette demand and supply the cigarette industry is a fascinating laboratory for industrial economists because of its concentrated market structure and history of conflicts over health and tax issues the industry has been the focal point of many economic studies most of the recent studies have concentrated on the demand side of the market for example bass schmalensee hamilton and fujii deal with the impact of advertising and the health scare on cigarette demand 4 15 10 8 barzel johnson and sumner ward assessed the importance of the excise tax or ad valorem tax on consumers cigarette demand 3 12 16 on the supply side vernon rives naylor developed an econometric model of the tobacco industry 20 which however is more concerned with the agricultural aspects of the product than the industry s market organization a careful review of the above studies suggests serious shortcomings which appear to limit their application to policy formulation or market analysis first the variables are introduced in an ad hoc fashion without reference to existing demand or supply theories second none of the above studies recognizes explicitly the interactions among the variables in the demand and the supply equations in the context of the determination of market equilibrium this paper has three objectives 1 to apply the standard neoclassical market theory to the cigarette industry 2 to identify the interactions between cigarette demand and supply using a simultaneous equations approach the first such attempt in a cigarette industry study and 3 to evaluate the effects of cigarette taxes advertising and health scare issues on the industry s output based on the empirical results obtained from the simultaneous equations analysis the judicious selection of explanatory variables careful data

evaluating energy efficiency investments accounting for risk in the discounting process a prominent feature of the literature regarding the economics of energy conservation is the debate over the existence and nature of the so called efficiency gap a frequent subject of debate is whether consumers apply a reasonable discount rate when evaluating the future benefits of energy efficiency measures a key aspect of the discounting debate is the manner in which consumer attitudes toward risk are accounted for when discounting this paper suggests that an appropriate approach to incorporating risk into the evaluation of energy efficiency projects would yield higher net benefits to such projects than standard evaluation techniques we argue that analysing the purchase of fuel saving capital as though it were a standard investment in a physical asset obscures an important feature of the decision rather than deciding whether or not to invest in an asset with an uncertain future benefit stream the consumer is actually choosing between two future cost streams each of which is uncertain this seemingly minor change in perspective has important implications for how the risk associated with fuel saving capital should be brought into the discounting process an example based on lighting technologies is used to illustrate the principles discussed

information and consumer perception of the organic attribute in fresh fruits and vegetables using a double hurdle model on panel data from 3 200 danish households monthly observations for 2002 2007 we study the effects of health related media information on the demand for organic fruit and vegetables we find that negative information about pesticides contained in conventional fruit and vegetables mainly influences the probability of a consumer entering the organic market not the quantities consumed by households that are already active on the organic market positive information that links health and the consumption of organic food influences both steps of the decision process our dataset includes information about consumers media habits which allows us to disentangle the direct effects of media information from the indirect effects of this information as it is disseminated through the population our results suggest that directly obtained information is the main type of information influencing consumers while information loadings by dissemination through the population have almost no effect on consumption

uncertainty loss aversion and markets for energy efficiency increasing energy efficiency is critical to mitigating greenhouse gas emissions from fossil fuel combustion reducing oil dependence and achieving a sustainable global energy system the tendency of markets to neglect apparently cost effective energy efficiency options has been called the efficiency gap or energy paradox the market for energy efficiency in new energy using durable goods however appears to have a bias that leads to undervaluation of future energy savings relative to their expected value this paper argues that the bias is chiefly produced by the combination of substantial uncertainty about the net value of future fuel savings and the loss aversion of typical consumers this framework relies on the theory of context dependent preferences the uncertainty loss aversion bias against energy efficiency is quantifiable making it potentially correctible by policy measures the welfare economics of such policies remains unresolved data on the costs of increased fuel economy of new passenger cars taken from a national research council study illustrate how an apparently cost effective increase in energy efficiency would be uninteresting to loss averse consumers

diffusion of renewable heating technologies in households experiences from the norwegian household subsidy programme abstract a sample of 896 norwegian households participating in a subsidy programme was surveyed in order to evaluate the success of the programme the programme subsidised investments in new heating technologies including heat pumps and pellet stoves the success of the programme was measured by the degree of overall satisfaction with the investment by the sampled households theories on diffusion of innovations and planned behaviour motivate the empirical modelling of the investment satisfaction the economic return on the investment varied substantially both within and between the two heating technologies with heat pumps outperforming pellet stoves in this respect still the economic return showed no explanatory power toward the investment satisfaction of the household among the economic variables only the electricity price had any influence on investment satisfaction technical quality indoor climate and heat comfort and the availability of the supplier of the heating equipment were the most important explanatory variables

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

explaining the energy efficiency gap expected utility theory versus cumulative prospect theory abstract energy efficiency is one of the key factors in mitigating the impact of climate change and preserving non renewable resources although environmental and economic justifications for energy efficiency investments are compelling there is a gap between the observable and some notion of optimized energy consumption the so called energy efficiency gap behavioral biases in individual decision making have been resonated by environmental research to explain this gap to analyze the influence of behavioral biases on decisions upon energy efficiency investments quantitatively we compare expected utility theory with cumulative prospect theory on basis of a real world example we illustrate how the extent of the gap is influenced by behavioral biases such as loss aversion probability weighting and framing our findings indicate that cumulative prospect theory offers possible explanations for many barriers discussed in literature for example the size of the gap rises with increased risk and investment costs because behavioral biases are systematic and pervasive our insights constitute a valuable quantitative basis for environmental policy measures such as customer focused and quantitatively backed public awareness campaigns financial incentives or energy savings insurances in this vein this paper may contribute to an accelerated adaption of energy efficiency measures by the broader public