a unified bilevel programming framework for price based market clearing under marginal pricing market clearing in restructured power systems is mostly implemented through an offer based setting with the goal of maximizing social welfare this approach leads to sound results from an economic viewpoint when generation offers reflect true production costs however offers may significantly differ from actual costs in practice thus yielding undesired distortion under a marginal pricing scheme this paper presents a general bilevel programming framework for alternative market clearing procedures dependent on market clearing prices rather than on offers the resulting nonlinear mixed integer bilevel programming formulation is transformed into an equivalent single level mixed integer linear program suitable for efficient off the shelf software the bilevel formulation is investigated through a particular instance of price based market clearing driven by consumer payment minimization this problem has recently received considerable attention due to the open challenges posed from both modeling and computational perspectives numerical results are provided to illustrate the performance of the proposed approach

mixed pool bilateral operation part iii unbundling costs of trading services for pt ii see ibid vol 17 no 4 p 1184 90 2002 some of the various services provided under mixed pool bilateral electricity trading are i power to satisfy bilateral contract demand ii power for transmission losses and congestion management due to bilateral contracts iii power for transmission losses and congestion management due to wheeling contracts and iv power for transmission losses and congestion management due to pool demand a procedure is developed and tested to unbundle these mw services as well as their corresponding costs thus allowing the calculation of the average cost of each service comparison of the average and marginal costs serves to evaluate the relative profitability of each service the goal of these results is to help generator and load serving entities choose appropriate relative levels of pool versus bilateral trades while considering risk economic performance and physical constraints

thermal plant bids and market clearing in an electricity pool minimization of costs vs minimization of consumer payments the spanish wholesale electricity market started on january 1st 1998 though it is based on simple price quantity bids it incorporates some provisions to take thermal plant running requirements into account this paper presents these rules and its mathematical treatment focusing on a possible implementation of the minimum income condition which allows thermal generators to declare minimum stable loads it also shows another key point in the debate whether the algorithm should minimize costs or consumer payments

assessing management options for weed control with demanders and non demanders in a choice experiment the yellow floating heart is a water weed causing nuisance problems in swedish water courses an economic analysis where various management options are considered is required using a choice experiment we estimate the benefits of a weed management program and perform a cost benefit analysis in order to be able to distinguish between those who have a demand for a program from those who do not we introduce a way to distinguish demanders from non demanders in the choice experiments using a simple cost benefit rule we find that cutting the weed in certain places in the lake can be justified

serial nonparticipation in repeated discrete choice models we consider alternative econometric strategies for addressing serial nonparticipation that is repeated choice of the same alternative or same type of alternative across a series of choice occasions in data typically analyzed within the repeated discrete choice framework single and double hurdle variants of the repeated discrete choice model are developed and applied to choice experiment and multisite seasonal recreation demand data our results suggest that hurdle models can generate significant improvements in statistical fit and qualitatively different policy implications particularly in choice experiment applications where the proper treatment of serial nonparticipation is relatively more ambiguous

on the solution of revenue and network constrained day ahead market clearing under marginal pricing part ii case studies this paper presents the numerical analysis of the bilevel programming approach for revenue and network constrained market clearing developed in its companion paper the impact of minimum revenue conditions and minimum declared profits on generation and consumption levels as well as on locational marginal prices for energy is examined in detail through three case studies first the results from an illustrative example including minimum revenue conditions are comprehensively analyzed the second case study is based on the ieee reliability test system and considers minimum declared profits in the third case study a modified version of the ieee 118 bus system is tested while accounting for minimum revenue conditions in addition the computational behavior of the proposed approach is illustrated with several case studies including the ieee 300 bus system numerical results show the effectiveness of the proposed approach to handle revenue constraints as well as its superiority over the heuristic currently implemented in the iberian electricity market moreover simulations reveal that unlike previous works in the literature generation revenue constraints can be precisely incorporated in day ahead market clearing while explicitly considering the standard economic dispatch based marginal pricing scheme and without requiring price uplifts

effects of farm size education and off farm income on productive efficiency of dairy farmers in utah a stochasitc frontier approach this study is primarily concerned with investigating the technical allocative and scale inefficiency of owner operators of dairy farms in utah a stochastic production frontier has been applied to analyze these inefficiencies the results indicate that there is positive association between years of education and productivity of labor and capital productivity is also found to be negatively related to off farm income regarding the effects of farm size on efficiency it is found that large farms are the most efficient of all sizes considered separate estimates of technical allocative and scale inefficiencies indicate that large and medium sized farms are technically more efficient than small farms large farms on average are found to be performing much better than medium sized and small farms so far as allocative and scale inefficiency are concerned copyright 1989 by mit press

estimation of distance decay functions to account for substitution and spatial heterogeneity in stated preference research in a site selection choice experiment various hypotheses are tested related to spatial heterogeneity in willingness to pay wtp for environmental improvements spatial heterogeneity is measured through distance decay effects substitute sites inside and outside the experiment s choice set and spatial trend variables we demonstrate that distance decay functions differ between users and nonusers and across study sites also the distance to substitutes outside the choice set explains spatial variation in wtp we show that further extending the model with spatial trend variables reveals additional spatial heterogeneity in choices accounting for spatial heterogeneity patterns results in significantly different wtp estimates for environmental improvements jel q25 q51

revenue adequate bidding strategies in competitive electricity markets energy trading in a competitive electricity market can be modeled as a two level optimization at the top level a centralized economic dispatch ced uses a priority list method to solve the fundamental problem of reliable market clearing with price discovery the lower level consists of a set of decentralized bidding db subproblems the db model uses a self unit scheduling simulator based on parametric dynamic programming to produce hourly bid curves for the central dispatch coordinator unit operating constraints and costs such as the unit minimum up and minimum down times ramp rates and the unit start up no load and sunk capital costs are internalized in the bid curves through the simulator a special algorithm is presented to solve the revenue adequacy problem for marginal units both ced and db models are based on the revenue maximization in contrast with the cost minimization criteria used in the conventional unit commitment uc the proposed method has been tested in a study case and some interesting results have been demonstrated

an ordinal optimization based bidding strategy for electric power suppliers in the daily energy market the deregulation and reconstruction of the electric power industry worldwide raises many challenging issues related to the economic and reliable operation of electric power systems traditional unit commitment or hydrothermal scheduling problems have been integrated with generation resource bidding but the development of optimization based bidding strategies is only at a very preliminary stage this paper presents a bidding strategy based on the theory of ordinal optimization that the ordinal comparisons of performance measures are robust with respect to noise and modeling error and the problems become much easier if the optimization goal is softened from asking for the best to good enough solution the basic idea is to use an approximate model that describes the influence of bidding strategies on the market clearing prices mcp a nominal bid curve is obtained by solving optimal power generation for a given set of mcps via lagrangian relaxation then n bids are generated by perturbing the nominal bid curve the ordinal optimization method is applied to isolate a good enough set s that contains some good bids with high probability by performing rough evaluation the best bid is then selected by solving full hydrothermal scheduling or unit commitment problems for each of the bids in s using ordinal optimization approach we are able to obtain a good enough bidding strategy with reasonable computational effort numerical results using historical mcps from the california market and a generation company with 10 units show that the ordinal optimization based method is efficient

modelling winners and losers in contingent valuation of public goods appropriate welfare measures and econometric analysis contingent valuation is now the most widely used method for valuing non marketed goods in cost benefit analysis yet despite the fact that many externalities manifest themselves as costs to some and benefits to others most studies restrict willingness to pay to being non negative this can result in significant errors in policymaking this paper examines the importance of this explores appropriate welfare measures for assessing losses and gains demonstrates how these can be elicited explicitly highlights the sensitivity of the results of such studies to the econometric specification employed and suggests ways of dealing with it finally the implica tions for policy are examined assessment including passive use values this technique has become the most widely used method for placing values on non marketed goods this paper examines some outstanding issues in relation to the validity of the method as a basis for policy making in particular most studies ignore the fact that many externalities manifest themselves as costs to some and benefits to others in addition the results of contingent valuation studies are often quite sensitive to the econometric specification assumed the significance of these issues is examined techniques for their resolution are outlined and the implications for public policy are highlighted the importance for economists of the debate on the validity of contingent valuation was emphasised in a series of papers from a symposium on the contingent valuation method cvm published in the journal of economic perspectives in 1994 in his paper portney 1994 predicted that whether the economics profession liked it or not the cvm would inevitably play a role in public policy formulation and therefore it was important that economists be aware of the controversies and have their say on the topic portney s prediction was correct and contingent valuation has become a routine approach to valuing environmental goods with hundreds of studies being produced each year 1 the cvm places a value on a change in the provision of a public good by asking households in a survey how much they are willing to pay for the change or the minimum compensation they would require if the change were not to happen the role that contingent valuation studies play in public policy is

existence and determination of competitive equilibrium in unit commitment power pool auctions price setting and scheduling alternatives the existence determination and effects of competitive market equilibrium for unit commitment power pool auctions are investigated in this paper when an equilibrium does not exist under specific situations conflictive multiple optimal primal solutions may exist when an equilibrium exists multiple primal solutions do not represent conflicts of interest the existence or nonexistence of competitive equilibrium can be determined if the dual problem is solved to optimality if equilibrium does not exist there is excess supply at the optimal dual solution which can be used to define priority orders and price setting alternatives to determine a final schedule and avoid the conflicts of interest and revenue deficiency under disequilibrium the optimal dual variables are not market clearing prices a nonuniform pricing rule that avoids the flaws and complications of other pricing rules such as maximum average cost and price minimization auctions is proposed in the paper the proposed scheduling and price setting alternatives show that unit commitment models can be used in a market environment

production cost minimization versus consumer payment minimization in electricity pools algorithms that involve some kind of optimization have been adopted by several electricity pools as a tool to clear the market traditionally this kind of models were used on a cost minimizing basis but recent papers have pointed out that alternative dispatches may be obtained that even with higher production costs result in lower electricity prices for consumers this paper studies this new payment minimization approach including the long term economic signals that it provides and their impact on future investments the authors results show that minimizing consumer payment results in discriminatory scheduling for certain generation resources and may cause in the long run higher prices for consumers

analysing the technical efficiency of the spanish football league first division with a random frontier model this article analyses technical efficiency of football clubs in the spanish football league division 1 primera liga from the seasons 1995 1996 to 2004 2005 with an unbalanced panel data the random frontier model is used allowing the identification of random variables in the cost frontier it is concluded that the price of capital investment the number of points won and attendance are heterogeneous variables therefore no common public policy aiming to improve efficiency can embrace all of the clubs so that policies by clusters are required

artificial power markets and unintended consequences administrative pricing rules that try to mimic economic equilibria often fail to capture the complexity of real markets and in that failure can distort incentives as much as or more than cost based pricing in this paper the authors provide three examples of the failure of administrative mechanisms meant to mimic a market two of those examples are very relevant to current debates over industry restructuring in each case the pricing rule fails to maximize social welfare even though in the last two examples production cost is minimized

on the solution of revenue and network constrained day ahead market clearing under marginal pricing part i an exact bilevel programming approach the first of this two paper series addresses a practical day ahead auction model where generation revenue constraints are explicitly incorporated in the problem formulation as routinely done in several national electricity markets across europe the revenue constrained market clearing procedure includes the effect of the transmission network inter temporal constraints associated with generation scheduling demand side bidding and marginal pricing this auction design is an instance of price based market clearing which features two major complicating factors first locational marginal prices become decision variables of the optimization process in addition producer revenues are formulated as bilinear and highly nonconvex products of power outputs and market clearing prices the resulting problem is formulated as a mixed integer nonlinear bilevel program with bilinear terms for which available solution techniques rely on heuristics approximations or modeling simplifications this paper presents a novel and exact methodology whereby the original problem is recast as an equivalent single level mixed integer linear program as a consequence finite convergence to optimality is guaranteed and the use of standard commercial software is allowed the proposed transformation is based on duality theory of linear programming karush kuhn tucker optimality conditions and integer algebra results in the second part of this two paper series numerical results from several case studies illustrate the effective performance of the proposed solution approach

using cheap talk as a test of validity in choice experiments abstract in two experiments on the choice of consumer goods the estimated marginal willingness to pay for food is found to be lower in the survey version with cheap talk our test can be seen as a test of hypothetical bias this implies that we cannot reject the hypothesis of a hypothetical bias for marginal wtp in choice experiments

the empirical identification of heterogeneous technologies and technical change when different technologies are present in an industry we assume that a homogeneous technology will lead to misleading implications about technical change and inefficient policy recommendations in this article a latent class modelling approach and flexible estimation of the production structure is used to distinguish different technologies for a representative sample of eu dairy producers as an industry exhibiting significant structural changes and differences in production systems in the past decades the model uses a transformation function to recognize multiple outputs separate technological classes based on multiple characteristics a flexible generalized linear functional form a variety of inputs and random effects to capture firm heterogeneity and measures of first and second order elasticities to represent technical change and biases we find that if multiple production frontiers are embodied in the data different firms exhibit different output or input intensities and changes associated wi

payment cost minimization auction for deregulated electricity markets using surrogate optimization deregulated electricity markets use an auction mechanism to select offers and their power levels for energy and ancillary services a settlement mechanism is then used to determine the payments resulting from the selected offers currently most independent system operators isos in the united states use an auction mechanism that minimizes the total offer costs but determine payment costs using a settlement mechanism that pays uniform market clearing prices mcps to all selected offers under this setup the auction and settlement mechanisms are inconsistent since minimized costs are different from payment costs illustrative examples in the literature have shown that for a given set of offers if an auction mechanism that directly minimizes the payment costs is used then payment costs can be significantly reduced as compared to minimizing offer costs this observation has led to discussions among stakeholders and policymakers in the electricity markets as to which of the two auction mechanisms is more appropriate for isos to use while methods for minimizing offer costs abound limited approaches for minimization of payment costs have been reported this paper presents an effective method for directly minimizing payment costs in view of the specific features of the problem including the nonseparability of its objective function the discontinuity of offer curves and the maximum term in defining mcps our key idea is to use augmented lagrangian relaxation and to form and solve offer and mcp subproblems by using the surrogate optimization framework numerical testing results demonstrate that the method is effective and the resulting payment costs are significantly lower than what are obtained by minimizing the offer costs for a given set of offers

spike models in contingent valuation spike models allow for a nonzero probability of zero willingness to pay in referendum style contingent valuation experiments they include many of the often used models as special cases and allow various analyses that are not possible in standard applications in this paper the economic rationale for the spike models and their estimation techniques are discussed and empirical illustrations are provided one study suggests that mean willingness to pay is zero and both studies strongly suggest that median wtp is zero these results have some bearing on the continuing debate of the incentive properties of hypothetical surveys and the construction of scenarios in contingent valuation experiments

dairy farm efficiency measurement using stochastic frontiers and neoclassical duality this paper presents a stochastic efficiency decomposition model based on kopp and diewert s deterministic methodology the stochastic model is used to analyze technical economic and allocative efficiency for a sample of new england dairy farms the results suggest that mean economic efficiency for the farmers in the sample is about 70 and that on average there is little difference between technical 83 0 and allocative 84 6 efficiency analyses of the relationship between efficiency and four socioeconomic variables farm size education extension and experience reveal that despite some statistically significant associations efficiency levels are not markedly affected by these variables

optimization based bidding strategies in the deregulated market with the deregulation of electric power systems market participants are facing an important task of bidding energy to an independent system operator iso this paper presents a model and a method for optimization based bidding and self scheduling where a utility bids part of its energy and self schedules the rest as in new england the model considers iso bid selections and uncertain bidding information of other market participants with appropriately simplified bidding and iso models closed form iso solutions are first obtained these solutions are then plugged into the utility s bidding and self scheduling model which is solved by using lagrangian relaxation testing results show that the method effectively solves the problem with reasonable amount of cpu time

market deregulation trade liberalization and productive efficiency in bangladesh agriculture an empirical analysis the impact of trade liberalization and of market deregulation in general on the performance of agriculture remains contentious and empirical issue in the literature following the random coefficient frontier modelling framework this paper attempts to contribute to this debate by computing the farm specific productive efficiency indices in bangladesh agriculture before and after reform it also examines the impact of some farm specific and policy variables on productive efficiency the empirical results show that there are wide variations in productive efficiency across farms and regions and the average efficiency of all regions increased modestly by 8 percentage points from the pre reform to post reform period the efficiency differentials are largely explained by farm size infrastructure households off farm income and the reduction of government anti agricultural bias in relation to trade and domestic policies the implication of these results suggests the need for further policy reform to augment p

valuing wetland attributes an application of choice experiments abstract the interest for wetlands is increasing not only because of the possibility of a cost efficient uptake of nutrients but also because wetlands can be designed to provide other services what values that are supplied depend largely on the design there are numerous different design options and different actors may promote different alternatives whether we want to design a wetland for nutrient retention alone or one that also serves other interests policy makers need information about the value of different options conducting a choice experiment we are able to identify attributes that increase and decrease citizens perceived value of wetlands using a random parameter model we find that biodiversity and walking facilities are the two greatest contributors to welfare while a fenced waterline and introduction of crayfish decrease welfare

auction design in day ahead electricity markets competition in day ahead electricity markets has been established through auctions where generators and loads bid prices and quantities different approaches have been discussed regarding the market auction design multi round auctions despite its implementation complexity allow market participants to adapt their successive bids to market prices considering their operational and economic constraints however most of the day ahead electricity market implementations use noniterative single round auctions this paper presents a market simulator to compare both auction models different auction alternatives such as the spanish single round auction that takes into account special conditions included in the generator bids and multi round auctions with different stopping rules are analyzed the results and acquired experience in the simulation of the spanish market started in january 1998 are presented hourly market prices average daily price price demand correlation and several economic efficiency indicators such as generator surplus consumer surplus and social welfare are compared to derive conclusions regarding the performance of the auction alternatives

consumer payment minimization in power pool auctions this paper presents a new methodology within the framework of centralized optimization for calculating optimal generation schedules that minimize energy payments by power pool consumers this paper addresses issues related to market structure and the operation of power pools such as bid evaluation generator no load and start up cost recovery generator unit operating constraints and market clearing price determination unlike conventional unit commitment algorithms that minimize total energy production costs the method presented here minimizes payments by power pool consumers a payment minimization objective leads to a different unit commitment and dispatch solution and lower market clearing prices additionally optimal allocation of generator no load and start up costs over the scheduling period is integrated in the bid evaluation process leading to a further reduction in consumer payments

barriers to massachusetts forest landowner participation in carbon markets u s forests including family owned forests are important carbon sinks and sources for carbon sequestration family forest owners constitute a significant portion of the overall forestland in the u s but little is known about their preferences for participating in carbon sequestration programs the goal of this research is to understand what motivates massachusetts family forest owners to participate in carbon markets the study estimates the probability these landowners would engage in carbon sequestration programs using data from a survey of 930 massachusetts family forest owners results from a random effects ordered probit indicate that under a carbon scenario similar to the current voluntary scheme very few of these landowners would be interested in participating supply analysis indicates these landowners are more influenced to participate by factors other than price regression analysis results suggest that survey respondents are concerned about early withdrawal penalties additionality requirements and contract length forest owner harvesting plans opinions about forest usage and beliefs about climate change all play a significant role in the decision to participate the study suggests that policy makers should consider the reasons behind these low participation rates because private forest owners could play a pivotal role in the carbon sequestration potential of forests

priced based operation in an auction market structure open transmission access is a new legal requirement within the electric power industry interchange will require evaluation of the existing conditions to determine if the product can be delivered at the time required and at the level awarded through the bidding or negotiation process this paper seeks to identify the likely deregulation details for a full market implementation when native load is considered equal to any other third party load comparability this paper seeks to identify the technical issues such as standards and algorithms necessary for changing the national infrastructure from a vertically integrated industry to a horizontally integrated industry

application of auctions as a pricing mechanism for the interchange of electric power the expected move to a market based electric power industry will significantly change electric utility operations these changes will fundamentally alter the pricing of electric power how this pricing will be accomplished is a key issue traditionally embedded cost based methods have been used spot pricing has received attention as a possible approach in a market based electric power environment another market based approach is the use of auctions this paper presents the application of a sequential sealed bid and sealed offer auction to the pricing of electric power by using linear programming

dealing with ignored attributes in choice experiments on valuation of sweden s environmental quality objectives using a choice experiment this paper investigates how swedish citizens value three environmental quality objectives in addition a follow up question is used to investigate whether respondents ignored any attributes when responding the resulting information is used in model estimation by restricting the individual parameters for the ignored attributes to zero when taking the shares of respondents who took both the environmental and the cost attributes 52 69 of the respondents into account then the wtp for each attribute changes if the respondents who ignored the attributes have a zero wtp at the same time we find evidence that not all respondents who claimed to have ignored an attribute really did however the most commonly ignored non monetary attributes always have the lowest rankings in terms of wtp across all three environmental objectives thus our results show that instead of ignoring attributes completely respondents seem to put less weight on the attributes they claimed to have ignored

convergence of volatile power markets with price based demand response price based demand response dr program is a mechanism for encouraging electricity consumers to dynamically manage their energy consumptions in response to time varying electricity prices and thereby reduce peak electricity demands and alleviate the pressure to power systems however it brings additional dynamics and new challenges to the real time supply and demand balance specifically if real time price based dr programs are widely deployed in the future price sensitive dr load levels would constantly change in response to dynamic real time prices which will impact the economic dispatch ed schedule and in turn affect electricity market clearing prices this paper adopts two methods for examining the impacts of different dr price elasticity characteristics and dr participation levels on the convergence of volatile power market a closed loop iterative simulation method and a non iterative method based on the contraction mapping theorem in this paper convergence refers to the fact that load and or price values will finally converge to a fixed point after a finite number of iterations between the ed problem and the price sensitive dr load adjustment five price sensitive dr performance function categories are used to simulate different nonlinear price elasticity characteristics of dr loads numerical studies illustrate how the convergence status of power markets will be affected by the nonlinear price elasticity dr curves the dr penetration levels and the capacity limits of generating units

preferences for site and environmental functions when selecting forthcoming national parks abstract a political decision to establish the first ever national parks in denmark allowed us to examine if people hold preferences regarding which site to be designated as national park separate from the preferences for its environmental functions to this end we designed a choice experiment representing the national park alternatives by the possible site and the possible improvements in environmental functions results revealed that respondents have strong preferences for the establishment of a national park per se furthermore there are significant differences in taste parameters for the different sites which cannot be explained by respondents valuing the different functions differently across sites instead we explain the results with differences in regional and cultural preferences we also performed a balanced split sample test of anchoring effects and found clear evidence of this we included a zero bidder screening question prior to the choice set part of the survey instrument to improve wtp estimation

nonparticipation or misspecification the impacts of nonparticipation on dichotomous choice contingent valuation dichotomous choice or referendum contingent valuation surveys have become the predominate choice for valuing goods and services otherwise not valued in a standard market nonmarket goods and services a number of researchers have recently recommended that dichotomous choice contingent valuation studies include a follow up question to all no responses to determine whether the no response is a result of unwillingness to pay or nonparticipation if the goal of the study is to investigate the impact of covariates on either mean willingness to pay or the probability of nonparticipation simple identification of indifferent individuals will not suffice a simulation study shows that existing econometric models designed to account for nonparticipation are extremely sensitive to misspecification bias accurate identification of the probability of nonparticipation is hampered by potential misspecification of the distribution of willingness to pay

network constrained day ahead auction for consumer payment minimization this paper presents an alternative day ahead auction based on consumer payment minimization for pool based electricity markets this auction is an instance of price based market clearing wherein market clearing prices are explicitly modeled as decision variables of the optimization the auction design includes network constraints inter temporal constraints associated with generation scheduling and marginal pricing hence consumer payment is expressed in terms of locational marginal prices the proposed solution approach is based on bilevel programming in the upper level optimization generation is scheduled with the goal of minimizing the total consumer payment while taking into account that locational marginal prices are determined by a multiperiod optimal power flow in the lower level in this bilevel programming setting locational marginal prices are the lagrange multipliers or dual variables associated with the nodal power balance equations of the lower level problem the resulting mixed integer linear bilevel program is transformed into an equivalent single level mixed integer linear program suitable for efficient off the shelf software this transformation relies on the application of results from duality theory of linear programming and integer algebra the proposed methodology has been successfully applied to several test systems including the ieee 118 bus system numerical results have been compared with those obtained from declared social welfare maximization

estimating technical efficiency of australian dairy farms using alternative frontier methodologies technical efficiency is estimated and examined for a cross section of australian dairy farms using various frontier methodologies bayesian and classical stochastic frontiers and data envelopment analysis the results indicate technical inefficiency is present in the sample data also identified are statistical differences between the point estimates of technical efficiency generated by the various methodologies however the rank of farm level technical efficiency is statistically invariant to the estimation technique employed finally when confidence credible intervals of technical efficiency are compared significant overlap is found for many of the farms intervals for all frontier methods employed the results indicate that the choice of estimation methodology may matter but the explanatory power of all frontier methods is significantly weaker when interval estimate of technical efficiency is examined

heterogeneous preferences regarding global climate change we examine the structure of preferences for mitigating impacts of global climate change that will not occur during the lifetimes of most who are alive today because no market data exist for such distant markets a statedpreference approach is used the analysis is based on the random parameters logit model and the results indicate substantial heterogeneity in respondent preferences that mean willingness to pay is a significant and increasing function of the scope of the impact and provocatively that respondents have the same preferences over the two very different time horizons that we consider e examine the structure of preferences for mitigating impacts of global climate change that will not occur during the lifetimes of most who are alive today studies using current market data have estimated the potential costs of climate change on agriculture mendelsohn nordhaus shaw 1994 and on other aspects of measured production nordhaus 1994 but market data can not reveal the willingness of those currently alive to pay for measures to mitigate impacts that may not happen for 100 years or more there is serious public discussion involving diplomats at the highest levels about measures to mitigate emissions that would cost the united states alone 100 to 200 billion dollars annually therefore estimating the willingness of those currently alive to pay for mitigation measures is not a fanciful exercise but rather a crucial effort to determine how much mitigation should be undertaken it is the preferences of those alive today regarding acceptable levels of climate impacts and not the unknowable preferences of those who do not yet exist that will ultimately determine how much mitigation we pursue in the next quarter century as this question cannot be answered with market data we use the stated preference sp approach and elicit preferences for preventing climate change induced impacts a host of climate change impacts have been enumerated this study focuses on one type of impact that may be important but has received little attention from economists scientists have predicted that widespread ecosystem shifts may accompany changes in climate vemap 1995 ecosys tem shifts are likely to evolve slowly indicating that lost use values are likely to be small for those alive today yet the public may still be willing and asked to pay for mitigation measures that are designed to slow the transformation of ecosystems the current debate over climate change demon strates two things the first is that some people do care about long term changes that will never affect them or perhaps even their children the second is that preferences regarding the impacts of climate change are very heterogeneous as other members of the public appear much less concerned long term horizons combined with heterogeneous prefer ences makes ecosystem shifts a useful place to begin analyzing preferences for mitigating climate change im pacts a stated preference survey was designed that asked respondents to choose their most preferred program to reduce ecological impacts from a set menu of five or six different programs the programs varied in terms of costs the degree of ecosystem change and in the mitigation method four different menus provided to each respondent yielded four distinct valuation responses section ii de scribes the random parameters logit model for repeated choices that allows for a flexible correlation structure based on heterogeneous preferences the ecosystem change and the stated preference survey are discussed in section iii in section iv we estimate the random parameters model and estimate the willingness to pay to prevent various levels of ecosystem change section v concludes with a discussion of how the scope of the impact preference heterogeneity and the time horizon affect willingness to pay

assessing the impact of economic liberalization across countries a comparison of dairy industry efficiency in canada and the usa this paper examines and compares the technical efficiency measures of ontario and new york dairy producers for the period 1992 to 1998 a nonparametric stochastic frontier model is introduced to estimate technical efficiency the backfitting algorithm of breiman and friedman is used to estimate the frontier empirical results indicate that during the period of study new york dairy farmers produced milk more efficiently than ontario dairy producers but the magnitude of the difference was small the estimated mean technical efficiency for the former group is 0 602 as compared to 0 532 for the latter the results also indicated that over time dairy farms in both regions improved their level of technical efficiency furthermore no correlation was found between farm size and estimated technical efficiency

estimating total factor productivity growth in singapore at sectoral level using data envelopment analysis trends in total factor productivity growth tfpg are examined in the ten major sectors of singapore data are drawn from the yearbook of statistics singapore various issues and economic survey of singapore series ranging from the year 1985 to 2000 due to the heterogeneous characteristic of each sector and non availability of reliable input price data this study uses a non parametric frontier methodology known as data envelopment analysis dea to obtain the malmquist productivity index at the sectoral level the results can help singapore identify the best practice sector and laggards in three aspects efficiency change technical change and tfpg which is the qualitative productivity improvements needed for long term economic growth the three sets of productivity estimates are adjusted for effects of inflation and business cycles so that they are more reliable for policy implications this exercise will provide a platform for more detailed study on the determinants of tfp growth in different s

strategic bidding in an energy brokerage this focus of this paper is to present a framework in which strategies may developed for the individual participants in an energy brokerage such a framework is expected to be important with the increasing interest in electricity market structures such as the energy brokerage that deregulation has produced to illustrate the process of strategic bidding a simple suboptimal bidding strategy is presented with the aid of a numerical example the bidding strategy must be suboptimal because of the amount of unknown information about the other bidders further tuning of this strategy will be required before application to realistic scenarios

a simulation model for a competitive generation market the simulation of a wholesale electricity market should go beyond a simple optimization based on the operating costs of the generating units a model of a competitive electricity market must consider the market structure the strategy of the market participants and any other factor that lead to prices different from costs this paper presents cosmee a model of a wholesale electricity market based on simple bids that estimates expected bid prices and quantities system hourly prices and generation schedules taking into account the bidding strategies of generators and the structure of the market the model reflects the profit maximizing behavior of the market agents subject to different types of constraints cosmee has been used to simulate a real wholesale market