natural resources and sub national economic performance does sub national democracy matter abstract the differentiation in the impact of resources on economic growth is often explained by the specifics of institutional factors the aim of this paper is to investigate how sub national political differences influence the effect of natural resources on economic growth using a dataset of russian regions this paper demonstrates that sub national democratization influences the growth effects of resources and considers possible mechanisms for this influence the paper finds that in russia natural resources are only capable of promoting growth in the regions with non democratic political systems that at the same time have an efficient and non corrupt bureaucracy

optimal electricity market for wind power abstract this paper is about electricity market operation when looking from the wind power producers point of view the focus in on market time horizons how many hours there is between the closing and delivering the bids the case is for the nordic countries the nordpool electricity market and the danish wind power production real data from year 2001 was used to study the benefits of a more flexible market to wind power producer as a result of reduced regulating market costs from better hourly predictions to the market wind power producer would gain up to 8 more if the time between market bids and delivery was shortened from the day ahead elspot market hourly bids by noon for 12 36 h ahead an after sales market where surplus or deficit production could be traded 2 h before delivery could benefit the producer almost as much gaining 7

market price behavior of wholesale electricity products texas abstract applying a regression based approach to a newly developed sample of over 60 000 hourly observations for 01 01 2011 12 30 2017 we answer the question what moves the day ahead market dam prices for energy and ancillary services as and the real time market rtm price for energy in the electric reliability council of texas ercot our answer comprises the following findings that capture the interdependence of ercot s energy and as products 1 the dam energy price increases with the day ahead forecasts of natural gas price system load and as requirements but declines with nuclear and wind generation s forecasts 2 the as prices increase with the dam energy price and the as procurement forecasts but decline with the as offer forecasts and 3 the rtm energy price increases with the dam energy price but diverges from the dam energy price due to forecasting errors related to the dam energy price s fundamental drivers these findings imply that texas can reduce the prices for day ahead energy day ahead as and real time energy via wind generation development and demand side management further texas can improve its electricity trading efficiency by improving ercot s forecast accuracy to narrow the rtm energy price s divergence from the dam energy price

raising children to work hard altruism work norms and social insurance children who can count on support from altruistic parents may not try hard to succeed in the labor market moreover parental altruism makes withdrawal of such support non credible to promote work

the lens of contract private ordering james buchanan 2001 p 29 avers that mutuality of advantage from voluntary exchange is the most fundamental of all understandings in economics he further contends that this fundamental understanding is better realized by examining economics through the lens of contract rather than the lens of choice buchanan 1975 because the latter has been the reigning paradigm in economics during the 20th century lionel robbins 1932 melvin w reder 1999 the lens of contract is understandably less fully developed interest in contractual approaches has nevertheless been building up whence the gap between these two has been closing this paper sketches some of these developments with emphasis on private ordering

the sources of divergent practices in china s nuclear power sector abstract unlike markets that were early developers of reactors which are dominated by single technologies china s nuclear power sector adopts and imports multiple technologies even after the chinese government introduced a policy to develop a standardized unified and technologically advanced nuclear power sector in the early 2000s different technologies continue to be imported this study uses an institutional lens to explore the decoupling of policy intentions and implementation the three phases of nuclear technology imports that occurred between the 1980s and 2010 are examined and compared data are collected from multiple sources including the diary of a major decision maker news articles project websites a regulation database domestic journal articles and interviews with industry experts using interactive content analysis this study identifies the multiple policy principles and goals of different domains that led to different import arrangements and interpretations of the available foreign technology new arrangements do not replace but overlap the existing ones that are perpetuated by the actors who benefit from them the results show that the multiplicity of china s nuclear power sector coupled with the government s late attempts at standardization contributes to diversified policy implementation they provide important policy implications for the sustainable development of the sector

the institutional reforms debate and fdi flows to the mena region the best ensemble summary this paper empirically examines the theoretical debate on the adoption of a best approach to reforming institutions identified by rodrik 2008 in the context of property rights protection and fdi flows to eight mena countries the first best approach comprises strengthening domestic institutional functions only while the second best comprises in addition entering into force bilateral investment treaties and the interaction between functions and treaties empirically both approaches to reducing investment expropriation risk encourage fdi flows the positive effect of the second best approach depends on the success of the first best approach suggesting the two approaches are complementary

comment on the awareness effects of mere distribution awareness forecasting models such as those discussed in mahajan muller and sharma mahajan v e muller s sharma 1984 an empirical comparison of awareness forecasting models of new product introduction marketing sci 3 summer 179 197 will be incomplete until they take account of the awareness effects of mere distribution distribution acts as both a main effect and as an interactive partner with advertising and promotion in the generation of awareness advertising in turn leads to distribution heeler et al heeler r m m j kearney b j mehaffey 1973 modelling supermarket product selection j marketing res 10 february 34 37

the influence of distributed generation penetration levels on energy markets planning of national energy policies brings new dilemmas with the introduction of distributed generators dg economic theory suggests that a perfectly competitive market would lead to efficient pricing in the absence of competition regulators play a fundamental role in attracting reasonably priced finance in order to maintain refurbish and increase the infrastructure and provide services at a reasonable cost energy market price equilibrium is mainly dependent on suppliers generators energy sources and demand represented by conventional utility grid users its behavior is similar to that of other commodities as generation becomes less centralized with the increasing economic viability of renewable energy sources new suppliers are being connected to the grid such evolution means the transition from a monopolistic market to a broader and more open environment with an increasing number of competitors we make use of variational inequalities to model a hypothetical dg market in different scenarios from monopoly to oligopoly to open market such an approach enables different equilibrium outcomes due to different dg penetration levels based on these findings we argue that energy policies for such markets must be developed according to each specific stage of the grid s lifecycle we show how energy policies and market regulations may affect such a transition which may be catastrophic if not managed properly and which is dependent on the energy mix

high penetration wind generation impacts on spot prices in the australian national electricity market this paper explores wind power integration issues for the south australian sa region of the australian national electricity market nem by assessing the interaction of regional wind generation electricity demand and spot prices over 2 recent years of market operation sa s wind energy penetration has recently surpassed 20 and it has only a limited interconnection with other regions of the nem as such it represents an interesting example of high wind penetration in a gross wholesale pool market electricity industry our findings suggest that while electricity demand continues to have the greatest influence on spot prices in sa wind generation levels have become a significant secondary influence and there is an inverse relationship between wind generation and price no clear relationship between wind generation and demand has been identified although some periods of extremely high demand may coincide with lower wind generation periods of high wind output are associated with generally lower market prices and also appear to contribute to extreme negative price events the results highlight the importance of electricity market and renewable policy design in facilitating economically efficient high wind penetrations

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

the impact of wind generation on wholesale electricity prices in the hydro rich pacific northwest extant literature documents that wind generation can reduce wholesale electricity market prices by displacing conventional generation but how large is the wholesale price effect of wind generation in an electricity market dominated by hydroelectric generation we explore this question by analyzing the impact of wind generation on wholesale electricity prices in the pacific northwest region of the united states this hydro rich system tends to be energy limited rather than capacity constrained with its marginal generation during the hydro runoff season often a hydro unit instead of a natural gas fired unit we find that increased wind generation reduces wholesale market prices by a small but statistically significant amount while a hydro rich system can integrate wind generation at a lower cost than a thermal dominated region the direct economic benefits to end users from greater investment in wind power may be negligible

evaluating the market splitting determinants evidence from the iberian spot electricity prices abstract this paper aims to assess the main determinants on the market splitting behaviour of the iberian electricity spot markets iberia stands as an ideal case study where the high level deployment of wind power is observed together with the implementation of the market splitting arrangement between the portuguese and the spanish spot electricity markets logit and non parametric models are used to express the probability response for market splitting of day ahead spot electricity prices as a function of the explanatory variables representing the main technologies in the generation mix wind hydro thermal and nuclear power together with the available transfer capacity and electricity demand logit models give preliminary indications about market splitting behaviour and then notwithstanding the demanding computational challenge a non parametric model is applied in order to overcome the limitations of the former models results show an increase of market splitting probability with higher wind power generation or more generally with higher availability of low marginal cost electricity such as nuclear power generation the european interconnection capacity target of 10 of the peak demand of the smallest interconnected market might be insufficient to maintain electricity market integration therefore pro active coordination policies governing both interconnections and renewables deployment should be further developed

impact of renewables on electricity markets do support schemes matter abstract rising renewable shares influence electricity markets in several ways among others average market prices are reduced and price volatility increases therefore the missing money problem in energy only electricity markets is more likely to occur in systems with high renewable shares nevertheless renewables are supported in many countries due to their expected benefits the kind of support instrument can however influence the degree to which renewables influence the market while fixed feed in tariffs lead to higher market impacts more market oriented support schemes such as market premiums quota systems and capacity based payments decrease the extent to which markets are affected this paper analyzes the market impacts of different support schemes for this purpose a new module is added to an existing bottom up simulation model of the electricity market in addition different degrees of flexibility in the electricity system are considered a case study for germany is used to derive policy recommendations regarding the choice of support scheme

dependence structure in the australian electricity markets new evidence from regular vine copulae abstract in this study regular vine copula was used to investigate the dependence structure of electricity prices at the state level in the australian national electricity market nem during three periods related to the adoption and abolition of the carbon tax in the pre carbon period we found evidence of tail dependence separately in the northern and southern nem but not across them during the carbon period the joint spike in the northern nem disappeared and the tail dependence in the southern nem decreased in the post carbon period the best dependence structure turned out to be a flexible structure of the regular vine which exactly matches the geographical infrastructure connectedness of transmission wires besides both upper and lower tail dependences were found in all adjacent states after the abolition of the carbon tax suggesting a more integrated market regarding tail dependence our findings have substantial implications for risk management in the nem especially for those participants exposed to multiple states

can green building councils serve as third party governance institutions an economic and institutional analysis abstract green building councils gbcs have been established in many different countries in recent years this paper discusses the role such organizations can play in the respective construction and real estate industry and under what circumstances a gbc can contribute positively to the development of a greener or more sustainable stock of buildings the paper investigates the main informational problem of the industry by looking at the relation between a developer and an investor from an economic point of view we argue that the investor s uncertainty about the true quality of a building and the corresponding incentive for the developer to cheat may lock them into a prisoners dilemma trap the corresponding barriers for a transition toward a greener buildings market are analyzed gbcs are described as institutions of economic governance that can assist the economy in overcoming these problems they can act as third party institutions in transactions between developers and investors by certifying the quality of a building they can reduce the risk for the investor to be cheated by the developer and also increase the incentive to develop good quality buildings for the developer this task however raises some severe management challenges for the gbcs

the hazards of piecemeal reform british civil courts and the credit market in colonial india abstract the colonial experience of developing countries provides valuable evidence regarding the impact of legal and institutional innovations on economic growth however there has been little effort by economists to study colonial policies to gain theoretical insights into the process of institutional reform this paper considers the introduction of civil courts in colonial india and its impact on agricultural credit markets in the bombay deccan drawing on historical records and a formal analysis of the credit market the paper finds that the reform led to increased competition among lenders ex ante we expect that this would have raised farmers welfare but increased competition also reduced lenders incentives to subsidize farmers investments in times of crisis leaving them more vulnerable in bad times

assessing the impact of wind generation on wholesale prices and generator dispatch in the australian national electricity market abstract growing climate change and energy security concerns are driving major wind energy deployment in electricity industries around the world despite its many advantages growing penetrations of this highly variable and somewhat unpredictable energy source pose new challenges for electricity industry operation one issue receiving growing attention is the so called merit order effect of wind generation in wholesale electricity markets wind has very low operating costs and therefore tends to displace higher cost conventional generation from market dispatch reducing both wholesale prices and conventional plant outputs this paper extends the current literature on this effect through an empirical study employing a range of econometric techniques to quantify the impacts of growing wind penetrations in the australian national electricity market nem the results suggest that wind is having a marked impact on spot market prices and while wind is primarily offsetting higher operating cost gas generation it is now also significantly reducing dispatch of emissions intensive brown coal generation great care needs to be taken in extrapolating these results to longer term implications however the study does propose a methodology for assessing this effect highlights the impacts that wind is already having on nem outcomes and suggests promising directions for future research

is renewable energy a cost effective mitigation resource an application to the spanish electricity market abstract this paper evaluates the net effect of renewable energy policy in spain from 2002 to 2017 and calculates its cost effectiveness in terms of co2 emission reductions in the production of electricity our conclusions indicate that although the phasing out of feed in tariffs reduced the regulatory costs it also limited renewable participation in the electricity market leading to an increased electricity price and higher emissions according to our results the joint effect of i the value of avoided emissions due to renewable energy participation and ii the merit order effect was able to compensate for the regulatory costs subsidies up until 2010 while the sign of the net effect was reversed from 2011 to 2017 finally we find that the economic implications of emission reductions are highly dependent on how the social cost of carbon is measured

second best institutions the focus of reforms in the developing world has moved from getting prices right to getting institutions right this reflects the recognition that markets are unlikely to work well in the absence of a predictable and legitimate set of rules that support economic activity and dis pense its fruits governance reforms have become the buzzword for bilateral donors and multilateral institutions in much the same way that liberalization privatization and stabiliza tion were the mantras of the 1980s but what kind of institutions should reform ers strive to build it is easier to list the func tions that good institutions perform than it is to describe the shape they should take desirable institutions provide security of property rights enforce contracts stimulate entrepreneurship foster integration in the world economy maintain macroeconomic stability manage risk taking by financial intermediaries supply social insurance and safety nets and enhance voice and account ability but as the variety of institutional forms that prevail in the advanced countries themselves suggests richard freeman 2000 peter hall and david soskice 2001 each one of these ends can be achieved in a large number of different ways rodrik 2007a

assessing the value of wind generation in future carbon constrained electricity industries this paper employs a novel monte carlo based generation portfolio assessment tool to explore the implications of increasing wind penetration and carbon prices within future electricity generation portfolios under considerable uncertainty this tool combines optimal generation mix techniques with monte carlo simulation and portfolio analysis methods to determine expected overall generation costs associated cost uncertainty and expected co2 emissions for different possible generation portfolios a case study of an electricity industry with coal combined cycle gas turbines ccgt open cycle gas turbines ocgt and wind generation options that faces uncertain future fossil fuel prices carbon pricing electricity demand and plant construction costs is presented to illustrate some of the key issues associated with growing wind penetrations the case study uses half hourly demand and wind generation data from south eastern australia and regional estimates of new build plant costs and characteristics results suggest that although wind generation generally increases overall industry costs it reduces associated cost uncertainties and co2 emissions however there are some cases in which wind generation can reduce the overall costs of generation portfolios the extent to which wind penetration affects industry expected costs and uncertainties depends on the level of carbon price and the conventional technology mix in the portfolios

belief in a just world and redistributive politics international surveys reveal wide differences between the views held in different countries concerning the causes of wealth or poverty and the extent to which people are responsible for their own fate at the same time social ethnographies and experiments by psychologists demonstrate individuals recurrent struggle with cognitive dissonance as they seek to maintain and pass on to their children a view of the world where effort ultimately pays off and everyone gets their just deserts this paper offers a model that helps explain i why most people feel such a need to believe in a just world ii why this need and therefore the prevalence of the belief varies considerably across countries iii the implications of this phenomenon for international differences in political ideology levels of redistribution labor supply aggregate income and popular perceptions of the poor the model shows in particular how complementarities arise endogenously between individuals desired beliefs or ideological choices resulting in two equilibria a first american equilibrium is characterized by a high prevalence of just world beliefs among the population and relatively laissez faire policies the other european equilibrium is characterized by more pessimism about the role of effort in economic outcomes and a more extensive welfare state more generally the paper develops a theory of collective beliefs and motivated cognitions including those concerning money consumption and happiness as well as religion

electricity market price and nuclear power plant shutdown evidence from california abstract japan s fukushima nuclear disaster triggered by the march 11 2011 earthquake has led to calls for shutting down existing nuclear plants to maintain resource adequacy for a grid s reliable operation one option is to expand conventional generation whose marginal unit is typically fueled by natural gas two timely and relevant questions thus arise for a deregulated wholesale electricity market 1 what is the likely price increase due to a nuclear plant shutdown and 2 what can be done to mitigate the price increase to answer these questions we perform a regression analysis of a large sample of hourly real time electricity market price data from the california independent system operator caiso for the 33 month sample period of april 2010 december 2012 our analysis indicates that the 2013 shutdown of the state s san onofre plant raised the caiso real time hourly market prices by 6 mwh to 9 mwh and that the price increases could have been offset by a combination of demand reduction increasing solar generation and increasing wind generation

portfolio applications in electricity markets review private investor and manager perspective trends abstract the private sector plays a major role in the expansion and operation of power systems in most countries especially those running liberalized electricity markets policymakers have the task of inducing private agents through their regulatory designs to make decisions that point toward social welfare maximization conversely it is a task of private agents to protect themselves against the risks of the sector including regulatory risks international fuel price uncertainty climate change policies natural resource availability electricity demand uncertainty co2 clearance prices etc instead of hiding all of these risks within the total project costs and losing competitiveness private agents can use diversification as a strategy to deal with them this paper presents a review of the main applications voids and challenges of portfolio optimization for two key agents of the private sector investors and managers the problem of the investor is to design a technology portfolio to invest in that maximizes its expected returns and limits risks while the manager has to design a portfolio of financial physical instruments long term contracts futures etc to sell buy electricity and hedge against price risks we have found two fundamental issues in the literature the first and most important is excessive confidence in historical data and statistical analysis for predicting future price behavior for a changing future in detriment of more structural analysis structural analysis can include particularities of modern power systems such as future transmission changes congestion operational constraints ramps new entrants new technologies and new demand grow patterns that cannot be taken into account by simply analyzing price historical values the second is the omission of renewable complementarities which is a proven characteristic of dispersed renewable plants that may have important risk mitigation effects although it has largely been ignored in portfolio analysis due to insufficient data modeling limitations and computational complexity

gambling reputation repeated bargaining with outside options we study the role of incomplete information and outside options in determining bargaining postures and surplus division in repeated bargaining between a long run player and a sequence of short run players the outside option is not only a disagreement point but reveals information privately held by the long run player in equilibrium the uninformed short run players offers do not always respond to changes in reputation and the informed long run player s payoffs are discontinuous the long run player invokes inefficient random outside options repeatedly to build reputation to a level where the subsequent short run players succumb to his extraction of a larger payoff but he also runs the risk of losing reputation and relinquishing bargaining power we investigate equilibrium properties when the discount factor goes to 1 and when the informativeness of outside options diffuses in both cases bargaining outcomes become more inefficient and the limit reputation building probabilities are interior publication abstract

economic development legality and the transplant effect abstract we analyze the determinants of effective legal institutions legality using data from 49 countries we show that the way the law was initially transplanted and received is a more important determinant than the supply of law from a particular legal family countries that have developed legal orders internally adapted the transplanted law and or had a population that was already familiar with basic principles of the transplanted law have more effective legality than countries that received foreign law without any similar predispositions the transplanting process has a strong indirect effect on economic development via its impact on legality while the impact of particular legal families is weaker and not robust to alternative legality measures

a neoinstitutionalist interpretation of the changes in the russian oil model this paper deals with the current change of the institutional and organizational framework of the russian oil industry regarding this evolution the main characteristic is the increasing involvement of national oil companies in the upstream activities the point is to explain this reorganization by relying on the new institutional economics framework these theoretical works highlight that institutional environment and governance structures complement each other we argue that the current reorganization in an attempt to increase the coherence of the institutional arrangement governing the transaction between the russian state and the private oil companies

pros and cons of exposing renewables to electricity market risks a comparison of the market integration approaches in germany spain and the uk abstract the article examines how renewable electricity res e producers are integrated into the electricity market under the support legislations and regulatory frameworks of germany spain and the uk focus is on wind power which faces the highest market integration challenge of all res e the analysis shows that the three countries follow contrasting approaches of exposing res e producers to the market risks of forward electricity markets balancing markets and system planning requirements risk exposure is highest in the uk and lowest in germany from a policy maker s perspective there is a trade off between a high risk and a low risk approach when res e face high market risks a higher level of financial support is required to stimulate res e development than in a low risk environment but the exposure to market risks may also give an incentive to make efficient use of the respective market thus limiting the indirect costs to society the special characteristics of wind energy however put natural limits to the response of wind power plants to market prices and locational price signals and will increasingly influence electricity markets and grid infrastructure these interdependencies should be recognised in the design of res e policies and market regulations

merit order effects of renewable energy and price divergence in california s day ahead and real time electricity markets abstract we answer two policy questions 1 what are the estimated merit order effects of renewable energy in the california independent system operator s caiso s day ahead market dam and real time market rtm and 2 what causes the hourly dam and rtm prices to systematically diverge the first question is timely and relevant because if the merit order effect estimates are small california s renewable energy development is of limited help in cutting electricity consumers bills but also has a lesser adverse impact on the state s investment incentive for natural gas fired generation the second question is related to the efficient market hypothesis under which the hourly rtm and dam prices tend to converge using a sample of about 21 000 hourly observations of caiso market prices and their fundamental drivers during 12 12 2012 04 30 2015 we document statistically significant estimates p value 0 01 for the dam and rtm merit order effects this finding lends support to california s adopted procurement process to provide sufficient investment incentives for natural gas fired generation we document that the rtm dam price divergence partly depends on the casio s day ahead forecast errors for system loads and renewable energy this finding suggests that improving the performance of the caiso s day ahead forecasts can enhance trading efficiency in california s dam and rtm electricity markets

entitled to work urban property rights and labor supply in peru this brief summarizes the results of a gender impact evaluation study entitled entitled to work urban property rights and labor supply in peru new legal rights were issued in 1996 project teams providing titling service through 2003 in peru the study observed that between 1996 and 2003 the peruvian government issued property titles to over 1 2 million urban households the largest titling program targeted at urban squatters in the developing world this paper examines the labor market effects of increases in tenure security resulting from the program pre program squatters in program neighborhoods were significantly more likely to report improved tenure security by 60 percent similarly program participants were 18 8 percentage points less likely to report a high likelihood of eviction or invasion and 18 8 percentage points more likely to report that their dwelling was currently very secure from eviction or invasion the likelihood of working inside the home significantly falls by 11 6 percentage points for the average squatter family with two program periods

the economics of rotating savings and credit associations supported by the center for energy policy studies m i t and the japanese corporate associates program at the kennedy school of government

trade expansion and contract enforcement consider a world of traders separated in geographic economic or social space honest trade offers larger gains for more distant traders but frequencies of meetings and information flows about cheating have local bias honesty is self enforcing only between pairs of sufficiently close neighbors global honesty prevails only in a sufficiently small world the extent of self enforcing honesty is likely to decrease when the world expands beyond this size costly external enforcement is useful only if the world is sufficiently large and its net payoff need not be larger than that of a self governing small community intermediate size worlds fare worst

the influence of governance infrastructure and corporate governance on profit shifting in this article we develop a conceptual model to examine the influence of quality of country level governance infrastructure and corporate governance effectiveness on profit shifting we empirically test propositions derived from the model with a unique firm level data set and using multiple indicators of governance infrastructure quality and corporate governance mechanisms we estimate that on average about 6 of total pre tax income is shifted out of foreign owned firms in india we show that governance infrastructure that improves collective action and transparency in both the foreign and host country reduces shifting on the other hand secure property rights and efficient contracting in the foreign country increases shifting we also find that monitoring by foreign institutional investors restricts shifting

coordination commitment and enforcement the case of the merchant guild we interpret historical evidence in light of a repeated game model to conclude that merchant guilds emerged during the late medieval period to allow rulers of trade centers to commit to the security of alien merchants the merchant guild developed the theoretically required attributes secured merchants property rights and evolved in response to crises to extend the range of its effectiveness contributing to the expansion of trade during the late medieval period we elaborate on the relations between our theory and the monopoly theory of merchant guilds and contrast it with repeated game theories that provide no role for formal organization

how renewable production depresses electricity prices evidence from the german market abstract the urgency of climate change has led several countries to develop renewable energy in order to reduce co2 emissions through the means of various subsidies in the electricity sector one drawback of such policies is the negative impact on electricity prices known as the merit order effect this paper aims at assessing how intermittent renewable production depresses electricity prices in germany which has experienced a significant increase of its renewable capacity over the last two decades to do so we use a two regime markov switching model that enables to disentangle the impact of wind and solar generation depending on the price being high or low we find as expected that renewable production induces a negative marginal effect which is stronger in regimes of relatively high prices in addition we show that both wind and solar productions have a significant impact on the distribution of prices and in particular on the frequency and expected duration of each regime this has implications in terms of market design security of supply and support mechanisms for renewables

texas s operating reserve demand curve s generation investment incentive abstract faced with reserve margin projections well below the adopted target of 13 75 of the system peak forecast the public utility commission of texas on 01 17 2019 ordered the state s grid operator the electric reliability council of texas to right shift the operating reserve demand curve ordc to increase generators revenue from energy sales in ercot s real time market rtm using a large sample of 15 min data for the backcast period of 01 01 2015 through 12 31 2018 we calculate the ordc shift s impact on rtm prices and investment incentives for natural gas fired generation ngfg had the ordc shift been in effect in the backcast period the resulting rtm price increases in 2018 could suffice to justify ngfg investment though not in the prior years of 2015 2016 and 2017 while the actual ordc shift occurred on 03 01 2019 had a large impact on rtm prices in the ensuing six month period of march august 2019 texas s planned renewable generation is expected to erode ngfg s operating profit thus diminishing the ordc s investment incentive over time hence texas s energy only market design will likely need further refinements to solve the missing money problem of inadequate ngfg investment incentive

the impact of renewables on electricity prices in germany an estimation based on historic spot prices in the years 2011 2013 abstract germany s public opinion and media usually attribute increasing electricity prices to the high share of renewables in the german power system but average electricity prices at the european energy exchange dropped during the last years due to an excess of renewable energy this study uses historic market data in order to quantify the effect of renewables on prices historic demand and supply curves from 2011 to 2013 have been used to reconstruct electricity prices under the assumption that no wind and pv would be available the analysis reveals an astonishingly high increase of market prices up to 5 29 ct kwh due to a lack of non renewable power capacities in 2013 the available conventional capacity would not have been able to cover the demand during 269 hours the estimated maximum deficit of 5 6 gw is in good agreement to data published by the german grid operators the discussion of the origin of this deficit leads to the conclusion that the current situation has not been caused by renewables the liberalization of the european energy market established investment risks that hindered required investment a long time before the renewables boomed

the effect of wind and solar power generation on wholesale electricity prices in australia abstract our paper investigates the effect of wind and utility scale solar electricity generation on wholesale electricity prices in australia over 2010 2018 we use both high frequency 30 min and daily datasets for the australian national electricity market nem we estimate autoregressive distributed lag models ardl to decompose the merit order effect of wind and utility scale solar pv generation over time and across states we find that an extra gw of dispatched wind capacity decreases the wholesale electricity price by 11 aud mwh at the time of generation while solar capacity by 14 aud mwh the daily merit order effect is lower we show that the wind merit order effect has been increasing as a function of dispatched wind capacity over time despite of this wholesale electricity prices in australia have been increasing predominantly driven by the increase in natural gas prices our findings further strengthen the evidence of the merit order effect of renewable energy sources with important implications for the current energy policy debate in australia

spatial dependencies of wind power and interrelations with spot price dynamics abstract wind power has seen strong growth over the last decade and increasingly affects electricity spot prices in particular prices are more volatile due to the stochastic nature of wind such that more generation of wind energy yields lower prices therefore it is important to assess the value of wind power at different locations not only for an investor but for the electricity system as a whole in this paper we develop a stochastic simulation model that captures the full spatial dependence structure of wind power by using copulas incorporated into a supply and demand based model for the electricity spot price this model is calibrated with german data we find that the specific location of a turbine i e its spatial dependence with respect to the aggregated wind power in the system is of high relevance for its value many of the locations analyzed show an upper tail dependence that adversely impacts the market value therefore a model that assumes a linear dependence structure would systematically overestimate the market value of wind power in many cases this effect becomes more important for increasing levels of wind power penetration and may render the large scale integration into markets more difficult

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

are the poor less well insured evidence on vulnerability to income risk in rural china the authors test how well consumption is insured against income risk in a panel of sampled households in rural china they estimate the risk insurance models by generalized method of moments treating income and household size as endogenous insurance exists for all wealth groups although the hypothesis of perfect insurance is universally rejected those in the poorest wealth decile are the least well insured with 40 percent of an income shock being passed on to current consumption by contrast consumption by the richest third of households is protected from almost 90 percent of an income shock the extent of insurance in a given wealth stratum varies little between poor and nonpoor areas

partisan alignment effects on total factor productivity aray h partisan alignment effects on total factor productivity regional studies unlike the literature on political effects on real economy that suggests that partisan effects accrue through aggregate demand it is hypothesized that such effects could also accrue through aggregate supply using panel data for the spanish regions over the 1986 2010 period the main results are 1 partisan alignment effects only arise when central government enjoys a majority 2 there exist a positive contemporaneous effect and negative lagged effects and 3 in absolute value such effects vanish over time results are robust to different specifications and measures of total factor productivity tfp and methods of estimation

good volatility bad volatility what drives the asymmetric connectedness of australian electricity markets efficient delivery of network services and the electricity infrastructure to meet the long term consumer s interests are the main objectives and the strategies of a national electricity market while the main interests of generators are to maximize their profit through pricing strategies therefore the objective of this study is to explore whether electricity prices across the four australian states display symmetric price volatility connectedness the study is the first attempt in the literature to make use of intraday 5 min australian dispatch electricity prices spanning the period december 8th 1998 to may 5th 2016 to quantify asymmetries in volatility connectedness emerging from good and bad volatility the results provide supportive evidence that the australian electricity markets are connected asymmetrically implying the presence of some degree of market power that is exercised by generators across regional electricity markets

social structure and cultures of corruption abstract corruption often creates a briber s dilemma each of the clients competing for a rent allocated by a government official has an incentive to pay bribes to try to obtain preferential treatment but they would all be better off if they could mutually commit not to pay bribes this paper uses a model of linked games to show how informal relationships among the clients may enable them to enforce agreements or norms against paying bribes and how historical events can lead to the development of a culture of corruption that can subsequently prove hard to dislodge

the relationship between distribution and market share this paper develops an aggregate level model of distribution and market share for frequently purchased branded consumer goods that is founded in the concepts of push and pull the model makes a key distinction between uncompromised and compromised demand as sources of market share uncompromised demand is demand that is satisfied when the preferred brand is found compromised demand results from brands that lack broad distribution and whose potential customers are willing to compromise and purchase another brand when the preferred brand is not present trade behavior is also addressed by analyzing the effects of consumer demand feedback on the trade s decision to stock and merchandise the brand compromised demand and feedback effects may be critical and often overlooked determinants of market share under a variety of model assumptions analytical results are consistent with longitudinal and cross sectional evidence that market share is a convex function of distribution increasing at an increasing rate up to 100 percent distribution in addition to these insights we believe that the model has promise for future normative work on balancing push and pull marketing effects

north s institutionalism and the prospect of combining theoretical approaches the distinction between new and old institutional economics may be unhelpful in depicting those theorists who defy clear categorisation one such writer is douglass north who is associated with the new institutionalism but who deviates from the neoclassical principles which supposedly form the foundations of this school the paper analyses his work to show how he combines both mainstream and alternative ideas in attempting to reconcile individual agency with social structure north suggests that institutions provide the constraints under which decisions are made but that individuals and organisations can alter those constraints while his work is an attempt to advance interdisciplinary research it fails to provide a fully integrated theoretical approach

the economics of governance the economics of governance is an effort to implement the study of good order and workable arrangements where good order includes both spontaneous order in the market which is a venerated tradition in economics adam smith 1776 friedrich hayek 1945 kenneth a arrow and gerard debreu 1954 and intentional order of a conscious deliberate purposeful kind chester irving barnard 1938 p 9 also i interpret workable arrangements to mean feasible modes of organization all of which are flawed in comparison with a hypothetical ideal avinash dixit 1996 pp 4 9 the object is to work out the efficiency logic for managing transactions by alternative modes of governance principally spot markets various long term contracts hybrids and hierarchies interest among social scientists economists included in the study and practice of good order and workable arrangements has been steadily growing in contrast with the orthodox lens of choice prices and output supply and demand the economics of governance is a lens of contract construction broadly in the spirit of james buchanan s 2001 p 29 observation that mutuality of advantage from voluntary exchange is the most fundamental of all understandings in economics the economics of governance as herein described is principally an exercise in bilateral private ordering by which i mean that the immediate parties to an exchange are actively involved in the provision of good order and workable arrangements to be sure the need for private ordering varies with the rules of the game as provided by the state distinctions between lawlessness where the state provides limited or unreliable protection for property and contract dixit 2004 and lawfulness where the state undertakes to protect property and enforce contracts in a principled way are pertinent the first of these applies mainly to primitive and transition economies the second is commonly associated with western democracies recourse to private ordering under conditions of lawlessness is altogether understandable given the absence of state support the walter a haas school of business university of california berkeley ca 94720 1900 the paper has benefited from workshop presentations at the university of california berkeley the university of valencia insead fountainebleau and the 2004 annual conference of the international society for new institutional economics an abbreviated version was also given as the horst claus recktenwald lecture at nuremburg on 4 november 2004 comments and suggestions from fred balderston ernesto dalbo avinash dixit robert gibbons witold henisz ian larkin steven tadelis and dean williamson are especially acknowledged 1 lon fuller s 1954 p 477 definition of eunomics as the science theory or study of good order and workable arrangements is very much in the spirit of what i refer to as governance 2 one of the immediate ramifications of insistently comparing feasible alternatives all of which are flawed is that the purported inefficiencies that are ascribed to failures to achieve first best optimality are not dispositive but invite the query as compared with what i return to this issue in section iv 3 excluding corporate governance the numbers of articles that used the word governance during the period 1998 2000 as compared with the period 1977 1979 in selected economics business management sociology organization and political science journals were 60 vs 1 76 vs 4 79 vs 18 and 60 vs 25 where the journals surveyed were the american economic review journal of political economy quarterly journal of economics rand journal of economics and journal of economic perspectives in economics strategic management journal management science academy of management journal and academy of management review in business management administrative science quarterly organization science american journal of sociology american sociological review and annual review of sociology in sociology organization and american political science review political science quarterly journal of politics and political research quarterly in political science combining these four categories articles using the word governance increased from 48 to 275 over this 20 year interval dixit 2004 pp 149 50 reports that the number of web pages that turn up under the search for governance is huge

the effects of advertising prices and distribution on market share volatility although the influence of marketing decision variables on market share has received ample attention in the literature less is known about their effects on volatility this study attempts to shed light on this issue by empirically examining the effects of advertising pricing and distribution not only on market share but also on its volatility using an egarch model we argue that establishing a link between management controlled actions such as advertising pricing and distribution and market share volatility may benefit firms seeking to reduce uncertainty in their market share performance application of the proposed model to data on two markets suvs and minivans suggested that advertising pricing and distribution significantly influence market share volatility

institutions top down or bottom up a large research program in economics has established a persuasive link between institutions and economic development but what does this imply for development policymaking can a political leader or aid agency seeking to promote development readily change institutions this article starts off wildly general and then moves to specifics