environmental regulation and u s economic growth in this article we quantify the costs of pollution controls by reporting the results of simulations of the growth of the u s economy with and without regulation for this purpose we have constructed a detailed model of the economy that includes the determinants of long term growth we have also analyzed the interaction between industries in order to capture the full repercussions of environmental regulations however we have not attempted to assess the benefits resulting from a cleaner environment we find that pollution abatement has emerged as a major claimant on the resources of the u s economy the cost of emission controls is more than 10 of the total cost of government purchases of goods and services

energy market liberalization and renewable energy policies in oecd countries abstract this paper investigates the effect of energy liberalization compared to other drivers on policies that support renewable energy in a long panel of oecd countries we estimate this effect by accounting for the endogeneity of liberalization related to joint decisions within a country s energy strategy using regulation in other industries as instruments we find that energy liberalization increases public support for renewable energy the effect of liberalization is the second largest after the effect of per capita income and is mostly driven by reductions in entry barriers while the effect of privatization is unclear this finding suggests that a reduction in the monopolistic power of state owned utilities has a positive effect on renewable energy policies when various types of actors are ensured access to the grid instead of it being provided to only a few large private firms

electric power sector reform liberalization models and electric power prices in developing countries an empirical analysis using international panel data this study aims to clarify whether the effects of electric power sector reforms should be different either across regions or between developing and developed countries an empirical model was analyzed to observe the impact of electric power prices on the selection of a liberalization model in the power sector this was achieved by the use of an ordered response fixed effect and a random effect model an instrument variable technique was also used to estimate the impact of the liberalization model on the electric power price this technique addressed the problems of simultaneity bias between the electric power price and the liberalization models selected these econometric models were designed using panel data from 78 countries in four regions developed countries asian developing countries the former soviet union and eastern europe and latin america for the period from 1985 to 2003 the research findings suggest that higher electricity prices are one of the driving forces for governments to adopt liberalization models however the development of liberalization models in the power sector does not necessarily reduce electricity prices in fact contrary to expectations there was a tendency for the price to rise in every market modeled

renewable energy non renewable energy and economic growth in brazil this study employs brazil s yearly statistics from 1980 to 2010 to explore the causal relationships between the real gdp and four types of energy consumption non hydroelectric renewable energy consumption nhrec total renewable energy consumption trec non renewable energy consumption nrec and the total primary energy consumption tec the cointegration test reveals a long run equilibrium among brazil s real gdp labour capital and each of the four types of consumption the development of the brazilian economy has close ties with capital formation and labour force the influence of nhrec trec on real output is positive and significant while the impacts by nrec tec are insignificant the results from the vector error correction models reveal a unidirectional causality from nhrec to economic growth a bidirectional causality between economic growth and trec and a unidirectional causality from economic growth to nrec or tec without feedback in the long run these findings suggest that brazil is an energy independent economy and that economic growth is crucial in providing the necessary resources for sustainable development expanding renewable energy would not only enhance brazil s economic growth and curb the deterioration of the environment but also create an opportunity for a leadership role in the international system and improve brazil s competition with more developed countries

industry classifications and return comovement a company s industry affiliation is commonly used to construct homogeneous stock groupings for portfolio risk management relative valuation and peer group comparisons a variety of industry classification systems have been adopted however creating disagreements as to companies industry assignments this analysis of the global industry classification system gics and fama french system indicates that common movement in returns and operating performance resulting from industry effects is stronger for stocks of large companies than for those of small companies also increasingly fine levels of disaggregation improve discrimination up to six digit gics codes after which the benefits tail off stock groupings based on industry exhibit stronger out of sample homogeneity than groups formed from statistical cluster analysis

liberalisation and r d in network industries the case of the electricity industry abstract electricity sector liberalisation has coincided with a significant decline in r d spending this paper reviews the industrial organisation literature on r d and innovation to explore the likely causes of the decline in r d spending in the electricity sector meanwhile r d productivity and innovative outputs in utilities and equipment suppliers appear to have improved however a lasting decline in r d expenditure can have a negative long term effect on technological progress and innovation in the sector we conclude that the decline in r d could have been predicted from the literature we also discuss the need to reorient the post liberalisation technology policy

herding with and without payoff externalities an internet experiment most real world situations that are susceptible to herding are also characterized by direct payoff externalities yet the bulk of the theoretical and experimental literature on herding has focused on pure informational externalities in this paper we experimentally investigate the effects of several different forms of payoff externalities e g network effects first mover advantage etc in a standard information based herding model our results are based on an internet experiment with more than 6000 subjects of which more than 2400 participated in the treatments reported here including a subsample of 267 consultants from an international consulting firm we also replicate and review earlier cascade experiments finally we study reputation effects i e the influence of success models in the context of herding

energy transition poverty and inequality in vietnam this paper investigates energy transition energy poverty and energy inequality in vietnam employing a longitudinal dataset of a nationally representative household survey we use the data on residential energy expenditure of more than 9 000 households over the period 2004 2016 we find a transition from traditional energy to modern energy but this transition varies across regions between ethnic and welfare groups and between rural and urban population the poor and ethnic minority households still rely heavily on traditional energy sources such as coal and biomass to meet their energy demands electricity poverty has decreased but energy cost poverty has increased in addition energy inequality tends to decrease at a more significant rate than income and consumption inequalities we propose a national program for energy poverty alleviation be established to devise policies to lower households energy costs further assistance to the poor and ethnic minority households is also recommended so that they can afford a higher level of electricity consumption

changes to gate closure and its impact on wholesale electricity prices the case of the uk abstract the electricity supply industry in the united kingdom underwent a number of regulatory reforms since late 80 s that have transformed the trading and pricing of the energy market herein we provide empirical evidence that the modification proposal p12 mod p12 that took place in 7 2 2002 moving the gate closure gc interval from 3 5 h to 1 h before real time has caused a permanent alteration in the uk spot price volatility using a combination of recurrence plot rp and recurrence quantification analysis rqa we find that after the the change in the gc time short term price volatility significantly decreased between 2001 and 2008 while long term price volatility is not affected by cg change similar results are obtained by means of spectral analysis on the price series showing a significant reduction in its variability the results of our analysis suggest that a dynamical regime shift of the price occurred and such shift is linked to the gc change whereby shorter gc intervals facilitate short term forecasting on electricity demand and better reliability on the supply side therefore gc closer to real time is associated to reduced price fluctuations in the wholesale market

assessing the financial performance of forestry related investment vehicles capital asset pricing model vs arbitrage pricing theory capital asset pricing model capm and arbitrage pricing theory apt are used to assess the financial performance of eight forestry related investment vehicles although results from apt support previous findings from capm about timberland investments three bodies of evidence show that apt findings are more robust the major conclusions are a institutional timberland investments and timberland limited partnerships have a low risk level and excess returns b forestry industry companies have not earned risk adjusted returns and the performance of medium forest industry firms is worse than that of large firms c stumpage price does not resemble the return generation process of timberland investments and d lumber futures have little excess return copyright 2001 oxford university press

assessing the determinants of household electricity prices in the eu a system gmm panel data approach abstract a meaningful portion of the consumer basket of european households and companies is embodied by electricity as well as gas or refined petroleum products as energy products are essential inputs of nearly all final goods and services whichever change of energy prices has a direct impact of the general price level in this context the main purpose of this study is to assess the main drivers of household electricity prices in the european union eu throughout a period of deep sector transformation relying on eurostat data not only we analyze the long term progress of household electricity prices across the eu but also we provide empirical evidence on their determinants while confronting the results with the eu energy policy path for this purpose a firsthand approach is herein developed based on a dynamic model with panel data through gmm proposal method by blundell and bond 1998 4 with the windermeijer 2005 41 correction the data analysis provides grounds for a relation between the variable of household electricity prices with variables related to sector liberalization renewable energy sources which support the eu policy to boost liberalization this study offers evidence that the sector liberalization is accompanied by a decreasing trend in prices which is consistent with the european commission s objectives to liberalize

the economic consequences of brexit energy in this paper we raise a number of issues that are important for the uk to consider in the light of its decision to leave the european union eu the first of these is the nature of the eu single market in electricity and gas and the uk s role within this the second is the nature of uk energy policy in the light of brexit and the opportunities for changing this and third we consider some of the key issues to be addressed in a negotiating position with the eu

renewable energy sources in the spanish electricity market instruments and effects the implementation of directive 2001 77 ec on the promotion of electricity produced from renewable sources sets a target of 22 1 of electricity consumption in the eu in 2010 and establishes various mechanisms that member countries may adopt depending on their needs this paper analyses these mechanisms their implementation in spain by means of rd 661 2007 and the degree of fulfilment of objectives it concludes with an analysis of the effectiveness of the mechanisms adopted and recommendations on market design

technical change and efficiency measures the post privatisation in the gas distribution sector in argentina abstract in this paper we use a stochastic frontier approach to analyse the technical change in the post privatisation period in the gas distribution sector in argentina we found that there is both a catching up effect and a shift in the frontier which shows that the sector as a whole improved its efficiency in the reviewed period moreover this phenomenon holds not only for the average but also for every firm in the sample

greener more integrated and less volatile a quantile regression analysis of italian wholesale electricity prices abstract this paper provides estimates of quantile regression models of the relationship between italian day ahead electricity prices the supply of renewables and the inception of a new cable sapei linking sardinia with the italian peninsula in the 2006 2015 time window the results confirm the merit order effects detected in the existing literature both for photovoltaics and wind power more strongly in market conditions characterised by moderately low price levels and with some implied increase in volatility the new cable has apparently challenged the ability of power generating companies to extract value through price spikes has mitigated volatility and its effects have been complementary with those of renewables effects from photovoltaics are more sensitive to robustness checks differences across zonal markets are nonetheless detected

electricity prices large scale renewable integration and policy implications abstract this paper investigates the effects of intermittent solar and wind power generation on electricity price formation in germany we use daily data from 2010 to 2015 a period with profound modifications in the german electricity market the most notable being the rapid integration of photovoltaic and wind power sources as well as the phasing out of nuclear energy in the context of a garch in mean model we show that both solar and wind power granger cause electricity prices that solar power generation reduces the volatility of electricity prices by scaling down the use of peak load power plants and that wind power generation increases the volatility of electricity prices by challenging electricity market flexibility

renewable energy consumption economic growth nexus in turkey abstract this paper examines the renewable energy consumption economic growth causality nexus in turkey studies in the literature can be grouped as country specific and multi country studies the results of these studies are inconsistent and there is no agreement on the existence or the direction of causality between renewable energy consumption and economic growth the results of this country specific study support conservation hypothesis the results of empirical tests from ardl approach show that renewable energy consumption has a negative impact on economic growth and the ones of toda yamamoto causality tests show that there is a unidirectional causality running from economic growth to renewable energy consumption

drivers of electricity price dynamics comparative analysis of spot and futures markets abstract against the backdrop of numerous evidence that variable renewable generation decreases electricity prices and increases price volatility this paper assesses the drivers of electricity prices in spot and futures markets focusing on the german electricity markets we take into account nonlinearities in electricity prices by means of structural breaks and threshold regressions we find that short run and medium long run price drivers differ and more importantly that they vary over time in the case of the spot market the determinants of prices are renewable infeed and electricity demand while in the futures market the main drivers are natural gas coal and carbon prices our results give relevant insights for market participants who seek to optimize procurement selling strategies in the spot market and use the futures market to hedge against spot price volatility which has increased due to a higher renewable generation

renewable generation and electricity prices taking stock and new evidence for germany and austria abstract economic theory predicts that the increase of renewable electricity production should reduce the price of electricity in the short run which is also known as the merit order effect although the merit order effect is only one of several consequences of renewable production on the electricity system it is crucial to determine its size for the economic evaluation of renewable energies in this paper we present a comprehensive overview of relevant past research results on the price effect of renewables additionally we conduct a new empirical analysis of the price effect of renewable production for the austrian german region a market that clearly qualifies for a merit order effect analysis given its characteristics based on the review and our own analysis we show that the merit order effect varies depending on the region and the assessment method chosen we also find that the size of this effect is less dispersed throughout different markets than previously suggested by the literature

costs and benefits of the renewable production of electricity in spain abstract the reduction of pollutant emissions and greenhouse gases as well as the strong energy dependence on fossil fuels gas and fuel oil have among other reasons led many countries in recent years to develop policies to promote and encourage the use of alternative sustainable clean and predictable sources of energy this paper presents an overview of the production of electricity from renewable sources pe res in spain and offers an outline of the current level of development of renewable energy it also reviews the current support system the costs of integrating renewable energy into the electric system as well as the effects of this type of energy on the electricity wholesale market price the gross domestic product gdp the environment human health and employment

the role of policy in energy transitions lessons from the energy liberalisation era the aim of this paper is to discuss the period of energy privatisation and liberalisation which began in the 1980s within its wider historical context the key issues are what has been learned from this recent period and how significant is it in the light of an energy transition to low carbon energy system by 2050 energy liberalisation has led to positive and globally widespread but modest efficiency gains but a lack of clearly visible direct benefits to households in many countries it has significantly improved the governance of monopoly utilities via independent regulators the prospects for competition and innovation and the quality of policy instruments for environmental emissions control through the emergence of trading mechanisms we conclude that it is not liberalisation per se that will determine the movement towards a low carbon energy transition but the willingness of societies to bear the cost which will be significant no matter what the extent of liberalisation

winners and losers from the privatization and regulation of utilities lessons from a general equilibrium model of argentina a computable general equilibrium cqe model is used to estimate the macroeconomic and distributional effects of the privatization and regulation of utilities in argentina begun in 1989 based on data available after the privatization that indicate different kinds of efficiency gains in electricity gas water and telecommunications both the privatization and effective regulation are estimated to yield significant macroeconomic benefits gains from the privatization accrue mainly to high income classes while gains from the effective regulation of newly privatized utilities accrue mainly to low income classes computable general equilibrium cge estimates of overall employment effects suggest that privatization was not a major contributor to the dramatic rise in unemployment in argentina between 1993 and 1995 this rise was more likely due to the tequila effect of an interest rate shock

the nexus of electricity consumption economic growth and co2 emissions in the brics countries abstract this study reexamines the causal link between electricity consumption economic growth and co 2 emissions in the brics countries i e brazil russia india china and south africa for the period 1990 2010 using panel causality analysis accounting for dependency and heterogeneity across countries regarding the electricity gdp nexus the empirical results support evidence on the feedback hypothesis for russia and the conservation hypothesis for south africa however a neutrality hypothesis holds for brazil india and china indicating neither electricity consumption nor economic growth is sensitive to each other in these three countries regarding the gdp co 2 emissions nexus a feedback hypothesis for russia a one way granger causality running from gdp to co 2 emissions in south africa and reverse relationship from co 2 emissions to gdp in brazil is found there is no evidence of granger causality between gdp and co 2 emissions in india and china furthermore electricity consumption is found to granger cause co 2 emissions in india while there is no granger causality between electricity consumption and co 2 emissions in brazil russia china and south africa therefore the differing results for the brics countries imply that policies cannot be uniformly implemented as they will have different effects in each of the brics countries under study

an introduction to field experiments in economics this special issue highlights an empirical approach that has increasingly grown in prominence in the last decade field experiments while field experiments can be used quite generally in economics to test theories predictions to measure key parameters and to provide insights into the generalizability of empirical results this special issue focuses on using field experiments to explore questions within the economics of charity the issue contains six distinct field experimental studies that investigate various aspects associated with the economics of charitable giving the issue also includes a fitting tribute to one of the earliest experimenters to depart from traditional lab methods peter bohm who curiously has not received deep credit or broad acclaim hopefully this issue will begin to rectify this oversight this abstract was borrowed from another version of this item

malmquist indices of productivity change in the uk gas industry before and after privatization the uk government s privatization programme was justified in terms of potential efficiency gains this paper concentrates on measures of technical efficiency in the regions of the uk natural gas industry before and after privatization and the associated regulatory changes it uses non parametric frontier analysis and malmquist indices to show that the rate of productivity growth increased significantly after privatization however the differences in technical efficiency amongst regions remain suggesting that failure to break up the industry has sacrificed potential gains from direct competition or indirect competition through yardstick regulation

social responsibility messages and worker wage requirements field experimental evidence from online labor marketplaces this paper examines the effects of employer social responsibility on the wages workers demand through randomized field experiments in two online labor marketplaces workers were recruited for short term jobs and i manipulated whether or not they received information about the employer s social responsibility i then observed the payment workers were willing to accept for the job in the first experiment information about the employer s social responsibility marginally reduced prospective workers wage requirements on average and had a significant effect on the highest performers who were willing to give up the wage differential they would otherwise demand in the second prospective workers submitted 44 lower wage bids for the same job after learning about the employer s social responsibility this paper provides causal empirical evidence of a revealed preference for social responsibility in the workplace and of a greater preference among the highest performers more broadly it provides evidence that

electricity consumption growth nexus evidence from panel data for transition countries abstract this paper investigates the long run relationship and causality issues between electricity consumption and economic growth in 15 transition countries albania belarus bulgaria czech republic estonia latvia lithuania macedonia moldova poland romania russian federation serbia slovak republic and ukraine by using the pedroni panel cointegration method for the 1990 2006 period results suggest that the pedroni panel cointegration tests do not confirm a long term equilibrium relationship between electricity consumption per capita and real gdp per capita moreover since no cointegration was found error correction mechanisms plus causality tests cannot be run for further steps in the long term to investigate the causality between electricity consumption and economic growth overall it can be said that the electricity consumption related policies have no effect or relation on the level of real output in the long run for these countries as a conclusion the literature has conflicting results and there is no consensus either on the existence or the direction of causality between electricity consumption and economic growth thus the findings of this study have important policy implications and it shows that this issue still deserves further attention in future research

the role of surprise understanding overreaction and underreaction to unanticipated events using in play soccer betting market abstract previous research in finance has found evidences of both overreaction and underreaction to unanticipated events but has yet to explain why investors overreact to certain events while underreacting to others in this paper we hypothesize that while market participants generally underreact to new events due to conservatism the extent of underreaction is moderated by surprise thus causing market participants to overreact to events that are highly surprising we test our hypothesis using data from an in play soccer betting market where new events goals are clearly and exogenously defined and the degree of surprise can be directly quantified goals scored by underdogs are more surprising we provide both statistical and economic evidences in support of our hypothesis

the empirical foundations of the arbitrage pricing theory abstract this paper uses maximum likelihood factor analysis of large cross sections to examine the validity of the arbitrage pricing theory apt we are unable to explain the expected returns on firm size portfolios although we do explain the expected returns on portfolios formed on the basis of dividend yield and own variance where risk adjustment using the usual capm market proxies fails we also compare alternate versions of the apt and sharply reject the hypothesis that basis portfolios formed to mimic the factors span the mean variance frontier of the individual assets

retrospective modeling of the merit order effect on wholesale electricity prices from distributed photovoltaic generation in the australian national electricity market in electricity markets that use a merit order dispatch system generation capacity is ranked by the price that it is bid into the market demand is then met by dispatching electricity according to this rank from the lowest to the highest bid the last capacity dispatched sets the price received by all generation ensuring the lowest cost provision of electricity a consequence of this system is that significant deployments of low marginal cost electricity generators including renewables can reduce the spot price of electricity in australia this prospect has been recognized in concern expressed by some coalfired generators that delivering too much renewable generation would reduce wholesale electricity prices in this analysis we calculate the likely reduction of wholesale prices through this merit order effect on the australian national electricity market we calculate that for 5 gw of capacity comparable to the present per capita installation of photovoltaics in germany the reduction in wholesale prices would have been worth in excess of a 1 8 billion over 2009 and 2010 all other factors being equal we explore the implications of our findings for feed in tariff policies and find that they could deliver savings to consumers contrary to prevailing criticisms that they are a regressive form of taxation

economic prescriptions for environmental problems how the patient followed the doctor s orders o ne of the dangers with ivory tower theorizing is that it is easy to lose sight of the actual set of problems which need to be solved and the range of potential solutions as one who frequently engages in this exercise i can attest to this fact in my view this loss of sight has become increasingly evident in the theoretical structure underlying environmental economics which often emphasizes elegance at the expense of realism in this paper i will argue that both normative and positive theorizing could greatly benefit from a careful examination of the results of recent innovative approaches to environmental management the particular set of policies examined here involves two tools which have received widespread support from the economics community marketable permits and emission charges pigou 1932 dales 1968 kneese and schultze 1975 both tools represent ways to induce businesses to search for lower cost methods of achieving environmental standards they stand in stark contrast to the predominant command and control approach in which a regulator specifies the technology a firm must use to comply with regulations under highly restrictive conditions it can be shown that both of the economic approaches share the desirable feature that any gains in environmental quality will be obtained at the lowest possible cost baumol and oates 1975 until the 1960s these tools only existed on blackboards and in academic journals as products of the fertile imaginations of academics however some countries have recently begun to explore using these tools as part of a broader strategy for managing environmental problems

the impact of regulatory quality and corruption on residential electricity prices in the context of electricity market reforms abstract the european electricity markets have been undergoing significant regulatory reforms since the introduction of the first liberalisation directive in 1996 theory predicts that liberalisation promotes cost efficient production and competition and hence leads to lower prices the goal of this paper is to assess the impact of regulatory quality and non compliance with the law on electricity prices in the context of electricity market reforms we address problems of endogeneity by using the blundell blond system gmm estimator and find that vertical integration and market concentration lower end user prices all else equal moreover improving regulatory quality and reducing corruption both have a negative impact on prices when holding other factors constant the intensity of the reforms has limited impact on electricity prices when these reforms are introduced in an institutional environment characterised by high levels of corruption and low quality regulation

why do electricity prices jump empirical evidence from the nordic electricity market the paper empirically explores the possible causes behind electricity price jumps in the nordic electricity market nord pool a time series model a mixed garch earji jump model capturing the com

do mergers improve efficiency evidence from restructuring the us electric power sector abstract this paper analyses the performance impact of the merger wave which took place in the us electricity industry during the period 1994 2003 it does so by analyzing the impact on operating and total cost in electricity distribution while there are past studies of efficiency and productivity effects as well as of prices profits and other outcomes this study differs in several ways first the database consists of many merging and non merging firms rather than only a few on which to base inferences second all of these mergers arise in a single industry greatly facilitating controlled comparison third we have data on the several years of pre merger and post merger efficiency of the specific merging units unlike virtually all past studies finally we employ a powerful nonparametric technique data envelopment analysis to measure the efficiency of each operating unit the results indicate that electricity mergers are not consistent with improved cost performance

energy consumption and economic growth nexus in portugal italy greece spain and turkey an ardl bounds test approach 1965 2009 abstract the paper examines the nexus between primary energy consumption and growth in portugal italy greece spain and turkey pigst with annual time series data from 1965 to 2009 pigst are southern european economies which have experienced several episodes that make them of particular interest to the study of periods of economic expansion and stagnation an ardl bounds test approach is a suitable technique to examine energy growth nexus within the context of countries with both sporadic shocks outliers and permanent shocks structural breaks empirical results suggest bidirectional causality between energy and growth in both the long run and short run supporting the feedback hypothesis the results reveal themselves to be robust to panel framework an energy conservation policy will reduce gdp growth while a saving phenomenon is observed since one additional unit of product requires less than one unit of energy

socio technical analysis of the electricity sector of mexico its historical evolution and implications for a transition towards low carbon development abstract the electricity sector of mexico has been found itself in continuous transitions since its beginning in the 19th century however the historical reform to the sector that recently took place together with new energy market configurations around the globe may pose an important challenge to transitioning towards a low carbon sector the work presented here was aimed at understanding in a qualitative manner the complex interactions between the main social technical and environmental aspects that have guided the sector in the past their influence on the current structure and its future development through the application of the multi level perspective mlp with a governance and agency perspective additionally the work tried to elucidate the implications of the incumbent position of the natural gas industry and the possibilities for low carbon technologies the conclusions remark the importance of previous sector configurations in the present structure the important role of government in promoting low carbon technologies together with investment by market actors and the possible window of opportunity that the natural gas industry in mexico may provide to low carbon energy technologies

the renewable energy policy paradox abstract one major avenue for policymakers to meet climate targets is by decarbonizing the power sector one component of which is raising the share of renewable energy sources renewables in electricity generation however promoting renewables in liberalized power markets creates a paradox in that successful penetration of renewables could fall victim to its own success with the current market architecture future deployment of renewable energy will necessarily be more costly and less scalable moreover transition towards a full 100 renewable electricity sector is unattainable paradoxically in order for renewable technologies to continue growing their market share they need to co exist with fossil fuel technologies ignoring these findings can slow adoption and increase the costs of deploying new renewable technologies this paper spots the incompatibility between electricity liberalization and renewable policy regardless of the country location or renewable technologies the paradox holds as long as market clear prices with short term marginal costs and renewable technology s marginal cost is close to zero and not dispatchable

local discouragement and global collapse a theory of coordination avalanches abstract we study a dynamic game in which all players initially possess the same information and coordinate on a high level of activity eventually players with a long string of bad experiences become inactive this prospect can cause a coordination avalanche in which all activity in the population stops coordination avalanches are part of pareto efficient equilibria they can occur at any point in the game their occurrence does not depend on the true state of nature and allowing players to exchange information may merely hasten their onset we present applications to search markets organizational meltdown and inefficient computer upgrades jel d83

on energy consumption and gdp studies a meta analysis of the last two decades abstract the relationship between energy consumption and gdp growth has been intensely examined in multiple frameworks set by various methods and countries this paper is a meta analysis of 51 studies published in the last two decades with worldwide data since 1949 on the relationship between energy consumption and gdp growth the aim is to systemize some of the factors that cause the variation of results in these studies our results yield evidence that the long run elasticity of gdp growth with respect to energy consumption is not independent of the method employed for cointegration the data type and the inclusion of variables such as the price level or capital in the cointegration equation also 1 increase in capital increases the elasticity of gdp with respect to energy consumption by 0 85

neoclassical theory versus prospect theory evidence from the marketplace several experimental studies have provided evidence that suggest indifference curves have a kink around the current endowment level these results which clearly contradict closely held economic doctrines have led some influential commentators to call for an entirely new economic paradigm to displace conventional neoclassical theory e g prospect theory which invokes psychological effects this paper pits neoclassical theory against prospect theory by investigating data drawn from more than 375 subjects actively participating in a well functioning marketplace the pattern of results suggests that prospect theory adequately organizes behavior among inexperienced consumers but consumers with intense market experience behave largely in accordance with neoclassical predictions moreover the data are consistent with the notion that consumers learn to overcome the endowment effect in situations beyond specific problems they have previously encountered this transference of behavior across domains has important implications in both a positive and normative sense

a global stock and bond model six fundamental risk factors four for stocks and two for bonds explain most of the common volatility of individual stocks and bonds worldwide some of the risk factors have a strong international component and others are more purely national the cross national component of the risk factors tends to be stronger within the european union than worldwide the model proposed in this article can be used for integration of worldwide asset selection and asset allocation decisions

examining the bi directional long run relationship between renewable energy consumption and gdp growth abstract the bi directional long run relationship between renewable energy consumption and gdp growth has been investigated in high income upper middle income lower middle income and high income countries to achieve this goal the fully modified ols was utilized the results revealed that 79 of the countries have a positive bi directional long run relationship between renewable energy consumption and gdp growth this represents the feedback hypothesis on the other hand 19 of the countries showed no long run relationship between the variables this represents the neutrality hypothesis besides 2 of the countries showed a one way long run relationship from gdp growth to renewable energy consumption confirming the conservation hypothesis and from renewable energy consumption and gdp growth representing the growth hypothesis despite the mixed results across countries it has been proved that the more persistent and significant the bi directional long run relationship between the variables is the higher the income countries are

the merit order effect a detailed analysis of the price effect of renewable electricity generation on spot market prices in germany the german feed in support of electricity generation from renewable energy sources has led to high growth rates of the supported technologies critics state that the costs for consumers are too high an important aspect to be considered in the discussion is the price effect created by renewable electricity generation this paper seeks to analyse the impact of privileged renewable electricity generation on the electricity market in germany the central aspect to be analysed is the impact of renewable electricity generation on spot market prices the results generated by an agent based simulation platform indicate that the financial volume of the price reduction is considerable in the short run this gives rise to a distributional effect which creates savings for the demand side by reducing generator profits in the case of the year 2006 the volume of the merit order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers

the financial and operating performance of privatized firms during the 1990s this study compares the pre and postprivatization financial and operating performance of 85 companies from 28 industrialized countries that were privatized through public share offerings for the period from 1990 through 1996 we document significant increases in profitability output operating efficiency and dividend payments and significant decreases in leverage ratios for our full sample of firms after privatization and for most subsamples examined capital expenditures increase significantly in absolute terms but not relative to sales employment declines but insignificantly combined with results from two previous directly comparable studies these findings strongly suggest that privatization yields significant performance improvements during the past two decades the privatization of state owned enterprises has moved from being a radical almost desperate policy initiative of the thatcher government in britain to being an accepted economic policy for governments of all ideological stripes according to gibbon 1998 860 billion has been raised by governments worldwide through privatizations with the bulk of this total coming since 1987 and at least one commentator roche 1996 predicts that no less than 6 trillion will be raised through privatizations over the next two decades in 1997 alone sales of public enterprises totaled a record 161 billion worldwide with more than 110 billion of the total coming during the second half of the year and 1998 s total of almost 140 billion indicates that the pace shows no sign of slackening as we approach a new millennium

electricity prices and public ownership evidence from the eu15 over thirty years abstract this paper studies the impact of corporate ownership on residential net of tax electricity prices when the ownership effect is separated from the liberalisation effect and from other drivers of change after a discussion of a simple conceptual model and of earlier literature we use iea and oecd data for the eu15 over nearly three decades panel econometrics suggests that after controlling for other factors public ownership is associated with lower residential net of tax electricity prices in western europe the impact of liberalisation on prices is smaller and more uncertain

objectives and incentives evidence from the privatisation of great britain s power plants abstract does privatization increase plant productivity because the private owner s objective is different or because they are better able to control management and is privatization sufficient to improve productivity or is it only effective in combination with competition we answer these questions using the quasi experiment of great britain s electricity industry privatization to separate the effect of a change in objectives from a change in incentives we assume that the former only affects labor but not fuel productivity and assuming that effective competition was only introduced after privatization we are able to separately identify the effects of privatization and competition we find that privatization increased labor but not fuel productivity evidence for the importance of objectives there is no evidence that the introduction of effective competition after privatization increased labor or fuel productivity evidence that privatization increases productivity by itself

revitalising the wind power induced merit order effect to reduce wholesale and retail electricity prices in australia this paper investigates the effect of increasing the number of wind turbine generators on wholesale spot prices in the australian national electricity market s nem given the existing transmission grid from 2014 to 2025 we use a sensitivity analysis to evaluate the effect of five different levels of wind power penetration on prices ranging from scenario a no wind to scenario e that includes existing and planned wind power sufficient to meet australia s original 2020 41twh large scale renewable energy target lret we find divergence in prices between states and similar prices for nodes within states this supports the garnaut climate change review assessment on the prevalence of gold plating the intrastate transmission network and underinvesting in interstate connectivity we find that increasing wind power penetration decreases wholesale spot prices but that retail prices have increased in deregulated south australia and queensland similarly in victoria we argue that there is a pressing need to split the large generator retail companies into separate retail and generator companies and to reassess regulatory rules more generally interconnector congestion limits the potential for wind power to further reduce wholesale prices across the nem so the need for a high capacity transmission backbone in the nem is becoming clearer and will become pressing when australia moves beyond its current 2020 lret

privatisation discontent and utility reform in latin america abstract privatisation faces strong and increasingly popular opposition in latin america this paper uses individual data on social attitudes socioeconomic status and demographic information from three waves of latinobarometro surveys 1998 2000 and 2002 in 17 countries to study the role of privatisation of utilities and its distributional impact we find that disagreement with privatisation is most likely when the respondent is on a low to middle income and when it involves a high proportion of public services such as water and electricity this complements recent empirical research that points to distributional concerns in the implementation of privatisation in latin america particularly because of inadequate regulation of utilities

electricity consumption from renewable and non renewable sources and economic growth evidence from latin american countries abstract this study explores the effect of renewable and non renewable electricity consumption on economic growth in 18 latin american countries to achieve the goal of this study a panel gross domestic product gdp model was constructed taking the period 1980 2010 into account from the pedroni cointegration test results it was found that renewable electricity consumption non renewable electricity consumption labor gross fixed capital formation and total trade are cointegrated moreover the panel dynamic ordinary least squares dols test results revealed that all above the mentioned variables have a long run positive effect on gdp growth in the investigated countries the vector error correction vec granger causality model results revealed the existence of feedback causality between the variables the results of the study indicated that renewable electricity consumption is more significant than non renewable electricity consumption in promoting economic growth in the investigated countries in the long run and the short run based on the results of this study it is recommended that the investigated countries should increase their investment on renewable energy projects to increase the role of electricity consumption from renewable sources in addition it is essential that these countries should reduce their non renewable electricity consumption by increasing their energy efficiency and implementing energy saving projects by applying these recommendations these countries would be able to mitigate global warming and reduce their dependency on fossil fuel to increase their energy security

priming the charitable pump an experimental investigation of two stage raffles i introduction lotteries or raffles are widely used as a voluntary fund raising mechanism for a variety of causes lottery pot sizes range from hundreds of dollars at small scale church and community organized events to hundreds of millions of dollars in state lotteries 1 small scale raffles are often conducted for charitable causes such as disaster relief efforts with proceeds transferred to charitable organizations the implementation of fixed prize raffles in the field may be challenging because the organizers can end up losing money if the total proceeds from the raffle are smaller than the value of the fixed prize self financing raffles in which the prize is generated through donations themselves are therefore an attractive alternative very popular in this class are simple 50 50 raffles in which one half of the ticket proceeds goes to the winner and the other half is used for the raffle s charitable cause the goal of a 50 50 charity raffle is simply to sell as many tickets as possible in order to maximize revenue for the charity one way to sell more tickets may be to advertise the size of the pot while raffle tickets are for sale one common example is to announce the pot size of a 50 50 raffle at halftime of a sporting event 2 if a larger pot size makes raffle tickets more attractive then revealing the intermediate pot size increases the sales to second half buyers especially if the pot size is larger than what they expected it to be another possibility is that the halftime announcement actually changes the incentives that participants face when buying tickets it may be possible to observe strategic contributions by the more charitable participants in the first half to make less charitable participants contribute more in the second half as the pot size becomes more attractive we refer to the effect be it strategic or not of a larger intermediate pot size inducing higher contributions in the second half as priming the pump of a raffle the goal of this paper is to better understand bidder behavior in these sorts of raffles where the intermediate pot size is revealed so that organizers can earn more money for their charity by comparing different raffle mechanisms in a controlled laboratory environment we can isolate those aspects of bidder behavior that an organizer may capitalize on more specifically we study whether priming the pump occurs with modifications of a simple 50 50 raffle in our two stage raffles participants can buy raffle tickets twice the proceeds from ticket sales in the first stage are added to the pot of the second stage we consider two types of two stage raffles in the complete draw down two stage raffle all the tickets purchased at the first stage are destroyed that is the proceeds of the first stage are used as seed money for the second stage in the no draw down two stage raffle the tickets purchased at the first stage continue to participate in the second stage draw that is the difference between this raffle and the standard one stage raffle is purely informational participants observe the first stage donations and can donate more if they like our study can be classified as a mixture of a laboratory and framed field experiment harrison and list 2004 list 2008 although the experiment is conducted in standard laboratory conditions with students as subjects we do not use induced valuations of the public good but instead allow subjects to contribute money to an actual charity 3 this reduces the amount of control we have over subjects incentives but provides a more immediate external validity to our results using a model of a charity raffle where bidders have a heterogeneous warm glow of donating to the charity we show that under certain conditions on the participants preferences priming the pump of the two stage raffle occurs in equilibrium however priming the pump increases revenues only if there is a drawing down of tickets after the first stage

an ex post analysis of the effect of renewables and cogeneration on spanish electricity prices abstract growing concerns about climate change and energy dependence are driving specific policies to support renewable or more efficient energy sources such as cogeneration in many regions particularly in the production of electricity these policies have a non negligible cost and therefore a careful assessment of their impacts seems necessary in particular one of the most debated impacts is their effect on electricity prices for which there have been some ex ante studies but few ex post studies this article presents a full ex post empirical analysis by looking at use of technologies and hourly electricity prices for 2005 2009 in spain to study the effects that the introduction of renewable electricity and cogeneration has had on wholesale electricity prices it is particularly interesting to perform this study in spain where an active system of public support to renewables and cogeneration has led to a considerable expansion of these energy sources and electricity pricing is at the center of intense debate the paper reports that a marginal increase of 1 gwh of electricity production using renewables and cogeneration is associated with a reduction of almost 2 per mwh in electricity prices around 4 of the average price for the analyzed period

electricity sector liberalisation and innovation an analysis of the uk s patenting activities abstract liberalisation has had a marked effect on innovative activities in the electricity industry in particular electricity reforms have resulted in a reduction in r d spending in the sector r d and patenting activities are respectively regarded as innovative inputs to and outputs from technological progress the present paper examines the effect of the reforms on patenting activity in the uk electricity sector the results indicate that electricity related patents in non nuclear and renewable technologies have increased in the post liberalisation period we attribute this trend to the increased commercialisation of the sector while this development is positive we argue that a lasting decline in r d will in the longer run reduce technological progress and innovation in the sector in order to maintain the pace of innovation we discuss the need to design a new framework for innovation systems that is commensurate with the functioning and incentive mechanisms of a liberalised sector

idiosyncratic variation of the us dollar we address the role of the us dollar when constructing a set of systematic statistical factors from a group of us dollar exchange rates researchers usually regard the us dollar as wholly systematic in this paper however we are able to decompose the us dollar and other currencies into systematic and idiosyncratic factors using the global prices for currencies rather than us dollar exchange rates using monthly data over a period of more than 44 years we find that approximately 25 of the total variation for the us dollar can be attributed to idiosyncratic variation

regime jumps in electricity prices many countries are liberalizing their energy markets participants in these markets are exposed to market risk due to the characteristics of electricity price dynamics electricity prices are known to be mean reverting very volatile and subject to frequent spikes models that describe the dynamics of electricity prices should incorporate these characteristics in order to capture the price spikes many researchers have introduced stochastic jump processes but we argue and show that this specification might lead to potential problems with specifying the true amount of mean reversion within the process in this paper we propose a regime switching model that models price spikes separated from normal mean reverting prices

averting economic collapse and the solipsism bias we study the behavior of experimental subjects who have to make a sequence of risky investment decisions in the presence of network externalities subjects follow a simple heuristic investing after positive experiences and reducing their propensity to invest after a failure this result contrasts with the theoretical findings of jeitschko and taylor jeitschko t d taylor c 2001 local discouragement and global collapse a theory of coordination avalanches amer econ rev 91 1 208 224 in which even agents who have only good experiences eventually stop investing because they account for the fact that others with worse experiences will quit this can trigger sudden economic collapse a coordination avalanche even in the most efficient bayesian equilibrium in the experiment subjects follow their own experiences and disregard the possible bad experiences of others thus exhibiting behavior that we term solipsism bias solipsism results in sustained investment activity and thus averts complete collapse

costly communication and learning from failure in organizational coordination abstract this paper investigates the coordination failure that arises from combining two small pre existing groups and focuses on the reaction of group members to this change in environment in an experiment small groups were first able to establish a coordination history in a repeated minimum effort game in the second phase two groups with different histories were combined into a larger group unlike most of the previous literature subjects could endogenously choose to communicate in the newly formed group for a small fee while communication proved to be necessary for preventing coordination failure in the newly formed group only every second subject was willing to implement communication particularly subjects from groups with a less efficient coordination experience in the first phase were more likely to realize the potential of coordination failure in the new group and were thus more likely to decide for communication the results may be useful for understanding how groups coordinate in changing environments as they are common in economic contexts

the role of portuguese electricity generation regimes and industrial production abstract this paper examines how renewables special regime simultaneously interact with conventional sources ordinary regime within the portuguese electricity generation system there is also an appraisal of the relationship between these two regimes and economic activity using the industrial production index first difference var modelling was applied for monthly data for the time span of 2007 m1 to 2012 m10 the appropriateness of the var is proved the relationship between variables develops within a structure of endogeneity i e they generate feedback and may be both explained and explaining variables simultaneously the outcomes show a strong complementarity between the ordinary and special regimes economic activity causes electricity consumption but only the special regime causes economic activity moreover the non renewable component of the special regime does not cause a need for backup from either the ordinary regime or imports contributing to a reduction in energy dependency

the three types of factor models a comparison of their explanatory power multifactor models of security market returns can be divided into three types macroeconomic fundamental and statistical factor models macroeconomic factor models use observable economic time series such as inflation and interest rates as measures of the pervasive shocks to security returns fundamental factor models use the returns to portfolios associated with observed security attributes such as dividend yield the book to market ratio and industry identifiers statistical factor models derive their pervasive factors from factor analysis of the panel data set of security returns this paper compares the explanatory power of these three approaches for u s equity returns

evaluating the effect of technology transformation on the electricity utility industry abstract the technology shift from fossil fuelled systems to renewable energies has been promoted by governments with the purpose of decarbonising the power industry however rapid technology progress has prompted disruptive changes that transformed market structures incumbent electricity utilities particularly those based on fossil fuel plant are shifting from their stable and predictable situation to confront challenges from those that offer alternative energy services in this new environment the industry will benefit from mid to long term sector foresight the paper studies the potential impact of renewable energy sources res on electricity systems specifically on the generation and distribution businesses for this purpose a fairly detailed and integrated supply and demand based system dynamics model has been built to quantify the extent of their potential impact the model disaggregates the household sector which may generate a significant part of its electricity using rooftop solar energy this is illustrated by examining a utility engaged in the generation and distribution businesses in the colombian electricity market through simulation runs this paper concludes that subject to policy and all other things remaining equal solar rooftop generation is a major threat for utilities while the generation business is most affected in the short term the distribution business is the one most impacted in the long term and jointly they may induce the utility death spiral

implications of liberalization policies on government support to r d lessons from electricity markets since the early 1980s electricity industry reforms have been initiated in more than half of the countries in the world among the primary targets of these reform schemes there has been an increase in efficiency of the sector and it is implicitly assumed that government support to energy technology r d will progress in line with the reform process as the former is required to sustain improved efficiency in the middle and long run the paper reviews the relation between reform process in electricity markets and government support to energy r d using panel data from 27 countries covering the period from 1974 to 2008 this study aims at finding out to what extent the expected correlation between reform process and government support to energy r d has in practice been materialized so far the findings suggest that contrary to expectations the progress toward electricity market reform is associated with reduced government support to a variety of energy r d activities which threatens sustainable efficiency improvements in the power industry

heterogeneous policies heterogeneous technologies the case of renewable energy this paper investigates empirically the effect of market regulation and renewable energy policies on innovation activity in different renewable energy technologies for the eu countries and the years 1980 to 2007 we built a unique dataset containing information on patent production in eight different technologies proxies of market regulation and technology specific renewable energy policies our main finding is that compared to privatisation and unbundling reducing entry barriers is a more significant driver of renewable energy innovation but that its effect varies across technologies and is stronger in technologies characterised by potential entry of small independent power producers in addition the inducement effect of renewable energy policies is heterogeneous and more pronounced for wind which is the only technology that is mature and has high technological potential finally ratification of the kyoto protocol which determined a more stable and less uncertain policy framework amplifies the inducement effect of both energy policy and market liberalisation

factors influencing farmers adoption of energy based water pumps and impacts on crop productivity and household income in pakistan abstract the current study is based on comprehensive cross sectional data set collected through field survey from all the four major provinces of pakistan i e punjab sindh kpk and balochitan in total 950 farmers were interviewed this paper attempts to examine the factors that influence farmers choice of water pumps e g electric diesel solar photovoltaic pv or biogas and to assess the impact of these water pumps on crop productivity household income and poverty the paper uses the multivariate probit model and propensity score matching approach in order to achieve these objectives the empirical results indicate that educated younger and wealthier farmers are more likely to adopt alternate energy based water pumps for irrigation access to credit facilities and frequent hours of load shedding are key factors influencing a farmer s decision to adopt alternative energy based water pumps rather than relying on electricity alternative energy sources have positive and significant impacts on the productivity of wheat rice and maize crops and on household income the use of alternative energy sources for water pumping has resulted in the reduction of poverty in the range of 11 20 the study has important policy implications the current energy crisis in pakistan has adversely affected farming operations and in turn crop yield and the use of water pumps for irrigation based on alternative energy sources has increased crop productivity access to these renewable energy technologies for water pumping should be encouraged through subsidies and easy availability of credit facilities as the majority of farmers in pakistan are resource poor with small landholdings

renewable energy regulation and structural breaks an empirical analysis of spanish electricity price volatility abstract international experience proves that electricity prices have undergone major changes in volatility since the entry of green technologies the intermittency of renewable sources is one of the reasons for these changes as it leads to higher volatility in periods of higher participation by renewables we argue that the development of the regulatory system promoting renewable electricity also plays a crucial role we raise a question that deserves attention could an incentive scheme induce higher share of renewables and lower volatility simultaneously in this paper we conduct an empirical analysis with spanish data we analyze possible ensuing structural changes in spanish electricity spot price volatility from january 2002 to december 2017 we identify two structural breaks linked to important measures related to renewable electricity i the abolishment of the feed in tariff scheme and ii the establishment of a more market oriented regulation based on investment and operating costs we conclude that stable regulatory policies reduce volatility even though the presence of renewable sources is greater furthermore market based policy measures achieve lower volatility encouraging good integration of intermittent renewable electricity

varieties of capitalism and the internationalization of state owned enterprises this article sheds light on how the internationalization of state owned enterprises is influenced by the state involvement in ownership and by the home country s institutional settings integrating international business literature with the debate on the varieties of capitalism we contend that state dominated enterprises internationalize more less than privately owned enterprises in coordinated liberal market economies whereas they exhibit an inconstant behavior in state influenced market economies our analysis on a sample of enterprises pertaining to 20 oecd countries supports our hypotheses this article adds to studies on the influence of institutions on firms internationalization and has implications for both managers and policymakers

effects of renewables on the stylized facts of electricity prices abstract many countries around the world have increased their renewable installed capacity due to a greater awareness of climate concerns under this new framework with renewables being among the main generation sources the literature warns of a dramatic change in price behaviour some of the most commonly claimed effects of having a significant proportion of renewable generating sources in the total electricity production mix include i a systematic decrease in overall wholesale market prices ii a higher occurrence of price jumps and iii a significant increase in price volatility the goal of the present study is to test whether these changes in price behaviour have actually come about to do so we focus on the spanish day ahead electricity market as a paradigmatic example in line with the literature it is found a statistically negative relationship between the renewable generation share and the day ahead market marginal prices as well we have obtained statistical confirmation of the fact that renewables generation share volatility is transferred to price volatility though similarly to other generation technologies finally in contrast to the general belief that the introduction of renewable generation would give rise to extreme positive prices according to our results increases in renewables generation share reduce the probability of upward jumps in prices the results obtained are of interest for portfolio managers practitioners and regulators

electricity costs in irrigated agriculture a case study for an irrigation scheme in spain abstract electricity prices have risen sharply in spain in recent years to the point where they are now among the highest in the eu the scant competition between power utilities changes in the law and the tariff deficit accumulated debt in favour mainly of the electricity firms have driven up the cost of electricity affecting numerous other industries such as irrigated agriculture a sector that has significantly increased its electricity consumption as a result of modernization processes over the past twenty five years we examine these issues through a case study of an irrigation scheme in spain that provides irrigation water and infrastructure to 58 farming communities in north eastern spain and is highly representative of the ebro valley based on the results of direct estimations and simulations of different tariffs we propose the lowering of capacity based tariffs to reduce sector problems and cut energy costs especially for farmers we also raise the possibility of increasing self consumption a complementary measure for many farmers and for medium size firms

on some economic principles of the energy transition abstract energy transitions are complex processes difficult to characterize using a small number of features we provide a simple framework for the energy transition pointing out that some scenarios have a higher probability the document is organized around four key propositions i the current energy transition is driven by policies rather than by technology improvements ii the energy transition disrupts liberalized electricity markets and undermines their economic foundation iii given the current technologies and technological perspectives the energy transition to renewable sources is going to be incomplete iv there is a change in consumer preferences for cleaner energy demanding new business models these propositions lead to the following consequences a the outcome in terms of electricity prices and energy production will depend on the policies applied as there are multiple possible policies and paths of energy transition b a complete transition based on renewable energy may be technically possible but difficult to manage in liberalized markets requiring a new design c there is a change in consumers preferences towards decarbonized energy creating new business opportunities and jeopardizing traditional business models it is difficult to make accurate predictions on the energy transition but we provide general guidelines for policymakers companies and investors

from state to private ownership issues from strategic industries abstract this paper investigates the effects of privatization for a panel of 189 firms from strategic industries headquartered in 39 countries and privatized between 1984 and 2002 strategic firms can hardly be compared to manufacturing or competitive industries as they are generally under state monopoly and involve specific issues such as regulation political and institutional constraints we examine the change in ownership and postprivatization means of control by the government and assess whether positive changes in performance obtain in these particular industries that include firms from the financial mining steel telecommunications transportation utilities and oil sectors we document that governments continue to exert influence on former state owned firms after three years by retaining golden shares and or appointing politicians to key positions in the firm our multivariate results reveal a negative effect of state ownership on profitability and operating efficiency which the presence of a sound institutional and political environment moderates

welfare impacts of electricity generation sector reform in the philippines abstract this paper reports an empirical investigation into the welfare impacts of the introduction of private sector participation into the philippines electricity generation sector by liberalizing the market for independent power producers ipps during the power crisis of 1990 1993 this study uses a social cost and benefit analysis the main benefits came from ipps who contributed to resolving the crisis and promoted economic and social development consumers and investors were net gainers while the government lost and there was an air pollution cost the paper concludes that the reform with private sector participation increased social welfare