energy prices and co2 emission allowance prices a quantile regression approach we use a quantile regression framework to investigate the impact of changes in crude oil prices natural gas prices coal prices and electricity prices on the distribution of the co2 emission allowance prices in the united states we find that i an increase in the crude oil price generates a substantial drop in the carbon prices when the latter is very high ii changes in the natural gas prices have a negative effect on the carbon prices when they are very low but have a positive effect when they are quite high iii the impact of the changes in the electricity prices on the carbon prices can be positive in the right tail of the distribution and iv the coal prices exert a negative effect on the carbon prices

analysis of policies to reduce oil consumption and greenhouse gas emissions from the us transportation sector abstract even as the us debates an economy wide co 2 cap and trade policy the transportation sector remains a significant oil security and climate change concern transportation alone consumes the majority of the us s imported oil and produces a third of total us greenhouse gas ghg emissions this study examines different sector specific policy scenarios for reducing ghg emissions and oil consumption in the us transportation sector under economy wide co 2 prices the 2009 version of the energy information administration s eia national energy modeling system nems a general equilibrium model of us energy markets enables quantitative estimates of the impact of economy wide co 2 prices and various transportation specific policy options we analyze fuel taxes continued increases in fuel economy standards and purchase tax credits for new vehicle purchases as well as the impacts of combining these policies all policy scenarios modeled fail to meet the obama administration s goal of reducing ghg emissions 14 below 2005 levels by 2020 purchase tax credits are expensive and ineffective at reducing emissions while the largest reductions in ghg emissions result from increasing the cost of driving thereby damping growth in vehicle miles traveled

substitute goods auctions and equilibrium this paper identifies two notions of substitutes for auction and equilibrium analysis weak substitutes the usual price theory notion guarantees monotonicity of t tonnement processes and convergence of clock auctions to a pseudo equilibrium but only strong substitutes which treats each unit traded as a distinct good with its own price guarantees that every pseudo equilibrium is a walrasian equilibrium that the vickrey outcome is in the core and that the law of aggregate demand is satisfied when goods are divisible weak substitutes along with concavity guarantees all of the above properties except for the law of aggregate demand

price determination in the eu ets market theory and econometric analysis with market fundamentals abstract we investigate the price determination of the european union emission allowance eua of the european union emissions trading scheme eu ets we postulate an uncertain permit price and risk averse firms which have the possibility to hedge in the forward market the firms produce final goods abate their emissions and trade permits in the permit market the dependence of the equilibrium permit price on exogenous variables is studied in a permit market model we test our theoretical findings with empirical data from 2005 to 2010 in the eu ets market we use daily forward prices of eua as our dependent variable we use several econometric models with multiple stationary time series to discover that there is a strong relationship between the fundamentals such as german electricity prices and gas and coal prices with the price of eua we find that the eua forward price depends on fundamentals especially on the price of electricity as well as on the gas coal difference in a statistically significant way

thinking about need public spending on the regions mackay r r and williams j 2005 thinking about need public spending on the regions regional studies 39 815 828 the uk treasury accepts that need is the correct guide to spending on public services in different parts of the uk but the formula used to decide changes in devolved spending in scotland wales and northern ireland depends on the population it does not compensate for differences in need with devolved spending determined by need there would be consistency across 11 of the 12 uk regions london would be the sole exception the heavy cost of the capital s public services is part of the argument for a more even distribution of income wealth and employment

integration of carbon risks and opportunities in enterprise risk management systems evidence from australian firms this study addresses managerial perceptions of risks and opportunities related to carbon pricing and emission management and the factors that affect the extent to which carbon related risks and opportunities are integrated into the organisation s formal enterprise risk management erm system we assess the role played by internal governance features resource availability managerial perceptions on competitive pressures and industry type on the inclusion of carbon risks within the erm system based on survey responses from 96 senior managers in australian carbon intensive firms i e firms listed in the 2009 publication of data under section 24 of the national greenhouse and energy reporting nger act 2007 we find that the extent of carbon risk integration is positively associated with the existence of a formal carbon strategy senior management involvement internal audit oversight resource personnel and funds availability and energy sector membership the paper also provides several insights into the perceptions of risks and opportunities confronting an organisation as a result of carbon pricing mechanism

comparing optima do simplifying assumptions affect conclusions consider a family of maximization models in which the optimum trades off beneficial and costly effects then comparative statics derived under many kinds of simplifying assumptions about the benefits technology are also true for general convex and nonconvex technologies for example any comparative statics conclusion about investment by a risk averse decision maker under uncertainty that holds when expected returns are described by a general linear function also holds for an arbitrary nonlinear expected return function

the lechatelier principle the lechatelier principle in the form introduced into economics by paul a samuelson asserts that at a point of long run equilibrium the derivative of long run compensated demand with respect to own price is larger in magnitude than the derivative of short run compensated demand the authors introduce an extended lechatelier principle that applies also to large price changes and to uncompensated demand as well as to a wide range of concave and nonconcave maximization problems outside the scope of demand theory this extension also clarifies the intuitive basis of the principle copyright 1996 by american economic association

carbon emission reduction the impact on the financial and operational performance of international companies abstract over the last few decades companies operate in an environment in which exercising responsibility is a prerequisite for competing owing to the growing social concern for ethical social and environmental issues the question of the impact of emissions trading on firm competitiveness has acquired special relevance in recent years this research analyzes the impact of the variation in carbon dioxide emissions on financial and operational performance by using international data consisting of 89 companies for the period 2006 2009 the findings show a reduction in emissions that generates a positive impact on financial performance in addition certain control variables are considered such as company size sector growth sustainability index and legal system while a panel data methodology is used as the analysis technique overall this research shows that companies promote greater environmental behaviour in order to obtain higher financial performance nonetheless the findings do not show evidence for operational performance this study contributes to the literature on carbon emission reduction and corporate performance moreover it complements previous literature in the sense that results obtained show a reduction in emissions that generates a positive impact on financial performance

regional spending a comment on mackay mackay 2001 recently examined the regional pattern of taxation and spending in the uk concluding that for four regions london the south east scotland and northern ireland public expenditure was well above the level expected for their degree of prosperity mackay 2001 had a very approximate measure of the regional pattern of non identifiable government expenditure a major component of the latter is defence spending and a more precise allocation of this suggests that london and the south east get very preferential treatment moreover so does the south west which should be added to the list of well favoured regions this raises important issues of spatial balance and efficiency

what explains the short term dynamics of the prices of co2 emissions using the vector auto regression var and the vector error correction models vecm this paper analyzes the short term dynamics of the prices of co2 emissions in response to changes in the prices of oil coal natural gas electricity and carbon emission allowances the results show that i a positive shock to the crude oil prices has a negative effect on the co2 allowance prices ii an unexpected increase in the natural gas prices raises the price of co2 emissions iii a positive shock to the prices of the fuel of choice coal has virtually no significant impact on the co2 prices iv there is a clear positive effect of the coal prices on the co2 allowance prices when the electricity prices are excluded from the var system and v a positive shock to the electricity prices reduces the price of the co2 allowances we also find that the energy price shocks have a persistent impact on the co2 allowance prices with the largest effect occurring six months after a shock strikes the effect is particularly strong in the case of the natural gas price shocks additionally we estimate that it takes between 7 3 and 9 6 months to halve the gap between the actual and the equilibrium prices of the co2 allowances i e to erase any price over or undervaluations after a shock strikes finally the empirical findings suggest an important degree of substitution between the three primary sources of energy i e crude oil natural gas and coal particularly when electricity prices are excluded from the var system

nationalism development and integration the political economy of ernest gellner in this paper we show how in gellner we can find a stimulating analysis of the institutional equilibria that characterise agrarian and industrial society and the conditions that make possible institutional change from one equilibrium to another this allows a convincing account of the reasons why some countries industrialised before others and why nationalism had such an uneven impact on the development of market economies we consider the relation between gellner s analysis and other theories of organisation and point out how gellner can help to solve some paradoxes that arise in these theories we also argue that joining gellner s contribution to the analysis of the positional nature of status and power reinforces his conclusion about the necessary stagnation of agrarian societies and the necessary over accumulation of different forms of capitalism we conclude by examining the implications of his analysis for the process of globalisation and its challenge to national states

inequality and violent crime abstract we investigate the robustness and causality of the link between income inequality and violent crime across countries first we study the correlation between the gini index and homicide and robbery rates within and between countries second we examine the partial correlation by considering other crime determinants third we control for the endogeneity of inequality by isolating its exogenous impact on these crime rates fourth we control for measurement error in crime rates by modeling it as both unobserved country effects and random noise finally we examine the robustness of this partial correlation to alternative measures of inequality the panel data consist of nonoverlapping 5 year averages for 39 countries during 1965 95 for homicides and 37 countries during 1970 94 for robberies crime rates and inequality are positively correlated within countries and particularly between countries and this correlation reflects causation from inequality to crime rates even after controlling for ot

how competitive are eu electricity markets an assessment of ets phase ii this paper studies the interactions between electricity and carbon allowance prices in the year ahead energy markets of france germany united kingdom and the nordic countries during phase ii of the eu ets var and granger causality methods are used to analyze causal interfaces whereas the volatility of electricity prices is studied with basic and asymmetric ar garch models among the main results the marginal rate at which carbon prices feed into electricity prices is shown to be ca 135 in the eex and nord pool markets where electricity and carbon prices display bidirectional causality and 109 in the uk therefore generators in these markets internalized the cost of freely allotted emission allowances into their electricity prices considerably more than the proportionate increase in costs justified by effective carbon intensity moreover electricity prices in france are found to granger cause the carbon price this study also shows how european electricity prices are deeply linked to coal prices among other factors both in terms of levels and volatility regardless of the underlying fuel mix and that coal was marginally more profitable than gas for electricity generation eu policies aimed at increasing the carbon price are likely to be crucial in limiting the externalities involved in the transition to a low carbon system

regional taxing and spending the search for balance the financial settlement has been described as the key to devolution public spending above tax in scotland and wales has been criticized public spending is above tax in seven uk regions including four english regions if we treat equal citizens equally public spending will be above tax in poorer regions there is nothing extraordinary about spending above tax but there are important questions with regard to regional levels of expenditure in four regions london south east scotland and northern ireland public expenditure is well above the level expected for their degree of prosperity this article provides possible explanations

territorial resource allocation in the uk a rejoinder on needs assessment in a recent paper in regional studies kevin morgan argued for the replacement of the barnett formula with a needsbased formula however the case for change is weak in terms of both defining the problem and advocating a solution and it fails to recognize the severe conceptual and measurement problems in such an approach the current system has provided patterns of resource allocation which are reflective of differences in needs it is a simple transparent and objective approach and has flexibility to deal with discrepancies through negotiation with the treasury a needs based approach would not solve the problems of resource allocation as it would provide scope for greater disagreement over the selection and weighting of indicators advocates of such an approach to territorial resource allocation have yet to provide a convincing rationale for change or a coherent model of needs assessment for consideration and are rash to assume that scotland would lose or wales would gain from such changes on the

a theorem on portfolio separation with general preferences abstract necessary and sufficient restrictions upon arbitrary utility functions for portfolio separation for any degree are derived for complete markets generalizing the expected utility theorems of cass and stiglitz j econ theory2 1970 122 160 portfolio separation is shown to be nearly synonymous with lewbel s econometrica59 1991 711 730 definition of demand rank which is characterized using standard duality methods journal of economic literature classification numbers g11 c43 d11

begging bowl meets baseball bat lessons for the uk from the australian fiscal model the uk has taken a historic step towards regionalized government with its creation of a scottish parliament and welsh and northern ireland assemblies however this has raised important question marks about the existing funding system the barnett formula the purpose of this article is to examine the experience offered by a mature federal fiscal system namely that of australia the australian system and in particular its fiscal system of distribution is outlined as are the effects of this system and the political manipulations of it that have taken place issues arising and important implications for uk policy makers are then discussed

scope economies market information and make or buy decision under asymmetric information abstract this paper presents a make or buy m b model in which a firm say firm 1 may produce in house or outsource a product to the unique vendor the monopolist in the outsourcing market demand for the finished product is stochastic and price sensitive and firm 1 s information forecast about the base market demand and corresponding precision are known when the m b decision is faced firm 1 is risk neutral and owns a constant return to scale technology while the vendor is risk averse and enjoys the advantage of scope economies a traditional solution is provided under perfect information under asymmetric information we demonstrate that when outsourcing is realized both parties expected profits increase with firm 1 s forecast accuracy only if the forecasted market demand is higher than the base demand i e good news outsourcing strictly dominates in house production if the yield of the vendor s production input is sufficiently low or its economies of scope are remarkably attractive furthermore it is optimal for firm 1 to hide information at first and decide whether or not to share information only after the vendor s supply price is announced however the vendor s profit is constrained by the trade off between the coordination effort for impelling firm 1 to share information and the advantages of its monopoly on outsourcing market low production costs as well as scope economies

the market linkage of the volatility spillover between traditional energy price and carbon price on the realization of carbon value of emission reduction behavior abstract establishing a carbon market is widely regarded as an effective means of controlling global carbon emission purchasing carbon emission right will increase the cost of enterprises especially for high energy consumption industry the volatility of carbon market will undoubtedly affect the behavior of these enterprises it has been well recognized that there is significant interaction between the carbon market and the fossil energy crude oil natural gas and coal market this paper employs recurrence plot rp method and recurrence quantification analysis rqa method to investigate the volatility spillover between the three different energy futures markets and carbon emission market the result shows that the volatility spillover between the coal market and carbon emission market is strongest based on this in order to avoid the risk from the carbon emission market industries should switch from coal to natural gas or oil and this behavior will lead to the reduction of carbon emission industries will change their energy consumption structure to a much cleaner one which will reduce air pollutant and the emission of carbon dioxide on the realization of carbon value

the barnett allocation mechanism formula plus influence christie a and swales j k the barnett allocation mechanism formula plus influence regional studies this paper seeks to explain why the operation of the barnett formula has failed to generate convergence in the per capita public expenditure levels in the four countries of the united kingdom using scotland as an example this paper argues that a formula plus influence allocation mechanism has been in place this offers improved flexibility greater political integration and increased information flows than would be available through either a straight bargaining or a formula process while devolution has not changed the barnett formula it has altered the environment in which it operates and that this may well destabilize an otherwise secure system christie a et swales j k la methode d affectation barnett formule plus influence regional studies cet article cherche a expliquer pourquoi l application de la formule barnett n a pas reussi la convergence des depenses publiques par tete dans les

selling online versus live a seller choosing between auctioning online and live faces a tradeoff lower transaction costs online against more rents left with the bidders we model this tradeoff and apply the theory to auctions of art the crucial parameter for whether the seller does better online than live is not the expected price but the valuation uncertainty

majority voting with single crossing preferences we clarify and extend a number of sufficient conditions for the existence of a majority voting equilibrium on one dimensional choice domains these conditions variously stated in the previous literature all impose order restrictions on voter preferences for instance monotone marginal rates of substitution which we show to imply or be equivalent to a general ordinal version of the single crossing condition this simple property is economically intuitive and easily checked in applications this ease of application is demonstrated through an examination of voting models of redistributive income taxation and trade union bargaining behaviour

research on the dynamic linkage among the carbon emission trading energy and capital markets abstract facing the huge pressure of emission reduction china officially launched a national carbon emission trading system at the end of 2017 the power industry is an important breakthrough in the construction of china s carbon emission trading system to push the optimization of the power structure through carbon constraint is the necessary path to promote the transformation of the power industry from fossil energy to clean and low carbon energy from the perspective of power consumption this paper constructs the linkage mechanism model of china s carbon emission trading market energy market and capital market and applies the dcc mvgarch model to analyze the dynamic linkage mechanism of the three markets the results show that the price fluctuation of the yield series of products in each market has clustering characteristics and the dynamic correlation has significant time varying characteristics and persistent characteristics the dynamic conditional correlation between the carbon emission trading market and the oil market and between the carbon emission trading market and the natural gas market are basically consistent the dynamic correlation coefficient between the carbon emission trading market and the capital market is negative which is related to the unreasonable quota setting in china s carbon emission market on the basis of empirical analysis the optimal balance weight and the optimal hedging ratio of each asset are determined

an empirical analysis of energy cost pass through to co2 emission prices abstract we use the nonlinear autoregressive distributed lag nardl model to analyze the asymmetric and nonlinear pass through effects of changes in crude oil prices natural gas prices coal prices and electricity prices on the co 2 emission allowance prices we find that i the crude oil prices have a long run negative and asymmetric effect on the co 2 allowance prices ii the decreases in the coal prices have a stronger impact on the carbon prices in the short run than the increases iii the natural gas prices and electricity prices have a symmetric effect on the carbon prices but this effect is negative for the former and positive for the latter these findings are robust when using both monthly and daily data and when considering bivariate and multivariate models

dynamic monotonicity and comparative statics for real options abstract we analyze the relationship between complementarities and monotonicity in dynamic programs while complementarities supermodularity and nondecreasing differences are sufficient for monotonic statics in stochastic dynamic programs they are only robustly necessary in a limited way under heavy discounting monotonicity of the decision rule doesnotin general imply monotonicity of the optimal path in fact optimal paths in such models may exhibit extremely complex behavior for convex adjustment costs many real option models have monotone decision rules while for fixed costs they typically do not we also strengthen a well known characterization of complementarities due to milgrom and shannon 19 journal of economic literatureclassification numbers c61 d92 e22

central banks at war war is expensive troops must be equipped and weapons must be procured when the enormous borrowing requirements of war make the sovereigns credibility problem more difficult central banks enhance a government s ability to borrow by being the sole direct purchaser of government debt the central bank increases the effective punishment that can be imposed on the government for defaulting on the marginal lender this increases lenders confidence that the government will be punished in case of default making lenders willing to purchase the debt at a lower rate of interest the sovereign dependent on the low borrowing costs offered by the central bank has an incentive to retain the bank data covering the nineteenth and early twentieth centuries reveal that possessing a central bank lowers the sovereign s borrowing costs particularly during times of war

the impact of pricing policy on sales variability in a supermarket retail context abstract the bullwhip effect is recognized to be a significant cost driver in supply chains one of the measures proposed frequently to counter bullwhip effect is price stability through everyday low pricing edlp however this study suggests that with an auto regressive ar1 demand process the use of constant instead of dynamic pricing may result in lower profitability and higher demand volatility an optimal price and stocking level policy is developed with normally distributed demand in this study and the model is tested using parameters from a supermarket scanner data set to determine the impact of two pricing policies the hypothesis that low prior period demand leads to discounted pricing is also tested and partially supported

voting under ignorance of job skills of unemployed the overtaxation bias abstract usual models on voting over basic income flat tax schedules rest on the assumption that voters know the whole distribution of skills even if at equilibrium some individuals do not work if individuals productivity remains unknown until they work it may be more convincing to assume that voters have only beliefs about the distribution of skills and that a learning process takes place in this paper at each period individuals vote according to their beliefs which are updated when getting new information from the job market the voting process converges towards some steady state equilibrium that depends on both the true distribution of skills and the initial beliefs the equilibrium tax rate is higher than or equal to the tax rate achieved in the perfect information framework an illustration is provided on french data if voters are over pessimistic as to the potential productivity of unemployed people majority voting may lock the economy in an informational trap with a high tax rate and a high level of inactivity

energy markets volatility modelling using garch abstract this paper investigates the empirical properties of oil natural gas and electricity price volatilities using a range of univariate and multivariate garch models and daily data from wholesale markets in the united states for the period from 2001 to 2013 the key contribution to the literature is the estimation of trivariate bekk and dcc models that allow us to observe spillovers and interactions among energy markets we evaluate and compare the performance of univariate and multivariate models with a range of diagnostic and forecast performance tests and assess forecasting performance and conditional correlation dynamics

risk transmission mechanism between energy markets a var for var approach abstract the global financial crisis gfc of 2007 2009 that originated in the us has revealed the need for measuring and monitoring the transmission of extreme downside market risk this paper investigates the risk transmission mechanism between the oil and natural gas markets we apply the recently introduced test statistics based on cross quantilogram function and the multivariate quantile regression model var for var to the us oil and natural gas prices which are independently formed our results show two asymmetric patterns first the shocks in the oil market substantially increase the value at risk var in the natural gas market but the reverse impact does not exist second we highlight the significant asymmetric response of gains and losses transmission in energy markets cautioning about the underlying weakness of adopting volatility to measure risk in the energy market moreover an extreme market risk is more easily transmitted across markets than moderate risks our results are in general robust in application to other regional energy markets such as europe and asia but the heterogeneities in responses are underpinned by the different role of natural gas in regions the findings in this paper have important implications for academic researchers policy makers in gas dependent economies and business practitioners in light of projected increases in the use of natural gas worldwide as well as the development of independent gas on gas competitive hub prices in asia and europe

information linkage dynamic spillovers in prices and volatility between the carbon and energy markets abstract the european union emissions trading system eu ets has strengthened the information flow and connection between carbon market and energy markets which makes the carbon energy system more complicated this paper investigates information linkages and dynamic spillover effects between the carbon and energy markets we adopt a systemic time series approach to study connectedness in both returns and volatility in the carbon energy system moreover a rolling windows method is used to show the dynamic features empirical results show that brent oil prices play an important role in affecting carbon price changes and risks feedback exists from the carbon market to other energy markets and electricity prices are shown to be the biggest information receiver in the system it is also shown that the level of connectedness in the volatility system is substantially higher than that in the returns system our results can provide useful implications for policymakers to design market mechanisms and market investors to manage their portfolios

a theory of employment unemployment and sickness beatty c fothergill s and macmillan r 2000 a theory of employment unemployment and sickness reg studies 34 617 630 this paper explains how the measurement of unemployment is distorted by the way that sickness is defined and counted by social security systems drawing on the concepts of hidden sickness the queue for jobs and hidden unemployment and on empirical observations from the uk it shows how job loss can result in increased recorded sickness rather than recorded unemployment it also shows how this process may vary between localities and countries the argument has profound implications for perceptions of the true extent of unemployment and of labour market disparities between regions beatty c fothergill s et macmillan r 2000 l emploi le chomage et la maladie une theorie reg studies 34 617 630 cet article chercheaexpliquer comment la mesure du chomage s avere fausseeacause de la fac on dont la secu definit maladie et la comptabilise puisant dans des notions de

forecasting carbon futures volatility using garch models with energy volatilities abstract this article examines the volatility forecasting abilities of three approaches garch type model that uses carbon futures prices an implied volatility from carbon options prices and the k nearest neighbor model based on the results we document that garch type models perform better than an implied volatility and the k nearest neighbor model this result suggests that carbon options have little information about carbon futures due to their low trading volume we also investigate whether the volatilities of energy markets i e brent oil coal natural gas and electricity forecast following day s carbon futures volatility according to the results we suggest that brent oil coal and electricity may be used to forecast the volatility of carbon futures

different paths to the modern state in europe the interaction between warfare economic structure and political regime theoretical work on taxation and state building borrows heavily from early modern european experience while a number of european states increased centralized tax revenues during this period for others revenues stagnated or even declined and these variations have motivated alternative arguments for the determinants of fiscal and state capacity this study reviews the arguments concerning the three determinants that have received most attention namely warfare economic structure and political regime and tests them by making use of a new and comprehensive tax revenue dataset our main finding is that these three determinants worked in interaction with each other specifically when under pressure of war it was representative regimes in more urbanized commercial economies and authoritarian regimes in more rural agrarian economies that tended to better aggregate domestic interests towards state building

dynamic hedge ratio estimations in the european union emissions offset credit market following the introduction of the european union emissions trading scheme in 2005 the size of the carbon market has been growing at a tremendous rate to meet the emissions reduction targets the regulated parties can choose to participate in the allowance based market by purchasing the spot allowances commencing in 2008 the regulated parties are also allowed to purchase the offset credits to meet their allowance limit given the risky nature of the offset credits this paper evaluates the hedging performance of dynamic hedge ratios for the carbon offset credit certified emissions reduction market in the eu ets to the best of our knowledge this paper is the first attempt to evaluate the hedging performance of dynamic and constant hedge ratios in the carbon offset credit market based on the variance reduction and utility improvement measurements the findings generally support the use of static hedge ratios over the more sophisticated dynamic hedge ratios

the impacts of liquidity dynamics on emissions allowances price different evidence from china s emissions trading pilots abstract the liquidities of china s emissions trading markets have significant impacts on emissions allowances price movement and pricing efficiency liquidity measures on illiquidity ratio and trade values indicate hubei emissions allowances hbea product has the highest liquidity shenzhen allowances sza and guangdong emissions allowances gdea products have the higher liquidity than beijing emissions allowances bea and shanghai emissions allowances shea products while tianjin emissions allowances tjea product has the lowest market liquidity in considered china s emissions trading pilots the dynamics of the illiquidity ratios for all selected emissions allowances products are negatively related with emissions allowances returns and trade volumes for bea tjea sza and hbea products are also negatively related with emissions allowances returns the dynamics of daily illiquidity ratios and trade based liquidity in beijing tianjin guangdong shenzhen hubei emissions pilots have significant volatility clustering impacts on the variances of regional emissions allowances returns previous market shocks of overnight and intraday price variations have the more persistent influences on the gdea returns than hbea returns reflecting greater inter day price ranges clustering effect

consumers surplus as an exact and superlative cardinal welfare indicator this article shows that the bennet bowley consumer surplus measure is an exact measure of allais disposable surplus if the consumer s utility function is of the translation homothetic generalized quadratic form the bennet bowley consumer surplus measure therefore is a superlative cardinal welfare measure for the entire class of translation homothetic preferences because the exactness results in this article apply for cardinal welfare measures they can be meaningfully aggregated across consumers to make aggregate welfare comparisons

market information and firm performance the value of new information depends on how accurate the information is but it may also depend on the characteristics of the firm and the nature of the industry it operates in we develop a game theoretic model to understand how firm and industry characteristics moderate the effect of market information on firm profits our results suggest that information is more valuable when product substitutability is higher suggesting that information is of greater value in more competitive industries our results also suggest that although industry size does not affect the value of information information is more valuable for larger firms we find that except under some conditions more precise market information has a greater impact on profits in a stackelberg mode of conduct than in a bertrand nash mode

exchange rate effect on carbon credit price via energy markets abstract this paper examines the impact of currency exchange rates on the carbon market we scrutinize this effect through the european union emission trading scheme eu ets which primarily uses two substitutable fossil energy inputs for the generation of electricity coal and natural gas the european coal market is directly driven by global coal markets that are denominated in usd whereas natural gas is mainly imported from russia and is denominated in euros the impulse response functions of a structural vector autoregression svar model demonstrate that a shock in the euro usd exchange rate can be transmitted through the channel of energy substitution between coal and natural gas and influence on the carbon credit market

evaluating the dynamic performance of energy portfolios empirical evidence from the dea directional distance function abstract in recent years the complex global energy commodity market has led to increased uncertainty for energy investment returns and tremendous challenges for investors to design appropriate energy portfolios therefore we employ four popular portfolio methods to determine energy portfolios based on daily fossil fuel futures prices during 2006 2015 moreover we use the dea window analysis method and dea directional distance function to comprehensively evaluate the dynamic performance of these energy portfolios based on the efficiency perspective the empirical results indicate that first to increase investment returns the mean variance method that exclusively emphasizes the maximization of returns shows the best performance however in order to decrease the volatility and risk of investment returns the mean variance method that aims to resist risk more than make profits and the bootstrap historical simulation value at risk var method have the best performance second when the global financial crisis broke out in the second half of 2008 and energy markets experienced a sharp downturn in the second half of 2014 the dea efficiency of energy portfolios appeared relatively lower than those of their neighboring periods regardless of which portfolio method is employed finally the average dea efficiencies of energy portfolios are all higher than those of single energy investment throughout the sample period except when the equally weighted method and the information entropy comprehensive index method are used meanwhile the mean variance method that prefers profit making to risk resisting possesses the highest average dea efficiency among various methods concerned

dual approaches to the analysis of risk aversion we present a dual formulation of choice under uncertainty based on a few simple assumptions about preferences it is shown that the additive separability restriction on preferences key to expected utility theory can be dropped with little loss of analytic power for a broad class of choice problems dual risk premiums are characterized and it is shown that placing various invariance restrictions on them leads naturally to generalizations of the concepts of cara crra and lrt familiar from expected utility theory each of these generalizations conforms to a notion of homotheticity

the impact of international price shocks on china s nonferrous metal companies a case study of copper copper is one of the most important nonferrous metals for modern society which should be utilized in a sustainable way because of its non renewable nature this paper addresses the relationship between price shocks from the international copper market and china s listed copper companies international copper market price shocks are disentangled into supply shocks aggregate demand shocks and specific demand shocks using the structural vector autoregression method then the asymmetric impact of those shocks on the stock prices of china s listed copper companies is examined the results indicate that demand shocks are the dominant factor influencing copper price fluctuations with their impact on stock prices being significantly higher than those of supply shocks in the long run supply shocks and demand shocks both have significant asymmetric impacts on stock prices while in the short run specific demand shocks have an asymmetric impact on stock prices

a more robust definition of subjective probability the goal of choice theoretic derivations of subjective probability is to separate a decisionmaker s underlying beliefs subjective probabilities of events from their preferences attitudes toward risk classical derivations have all relied upon some form of the marschak samuelson independence axiom or the savage sure thing principle which imply that preferences over lotteries conform to the expected utility hypothesis this paper presents a choice theoretic derivation of subjective probability in a savage type setting of purely subjective uncertainty which neither assumes nor implies that the decisionmaker s preferences over lotteries necessarily conform to the expected utility hypothesis copyright 1992 by the econometric society

automatic stabilisers european union and national unity tradition seems to require that economists argue forever about the question whether in any disequilibrium situation market forces acting alone are likely to restore equilibrium now this is certainly an interesting question but as social scientists we surely must address ourselves to the broader question is the disequilibrium situation likely to be corrected at all by market or nonmarket forces or by both acting jointly it is our contention that nonmarket forces are not necessarily less automatic than market forces hirschman 1958 p 63 emphasis in the original hirschman and myrdal 1957 consistently insist that the image of a relentlessly taut economy can be a check to curiosity and a bar to true enquiry a proper search for understanding hirschman and myrdal h and m suggest must relax the assumptions which ensure fully informed price signals and reactions that are automatic elastic responsive only then can one approach an economy which is consistent with reality an economic system where bargains and contracts are made at prices which do not clear markets where resources remain unemployed underemployed unrecognised and where there are problems in encouraging adjustment to constantly changing opportuni ties in such an imperfect but realistic economy there may be a role for nonmarket forces h and m make stronger claims given particular emphasis by hirschman is the idea that non market forces emerge naturally inevitably even without conscious volition when the market fails to discover reasonable balance society will recognise will sense the gap and state policies and social institutions will emerge in an attempt to bridge it the argument applies to different forms of balance and has links to myrdal s claim

assessing relative spending needs of devolved government the case of healthcare spending in the uk ball r eiser d and king d assessing relative spending needs of devolved government the case of healthcare spending in the uk regional studies the block grants allocated to the uk s devolved administrations are not determined by any estimate of their spending needs there are increasing calls to replace the current grant allocation mechanism with one that explicitly considers the devolved administrations spending needs this paper compares two existing formulae for estimating healthcare spending needs used by the national health service nhs to allocate resources within england and scotland by applying both formulae to the devolved administrations it is found that these formulae provide very similar estimates of the devolved administrations healthcare spending needs and both formulae imply that the current distribution of resources across the devolved administrations may be inequitable

optimization analysis of carbon emission rights allocation based on energy justice the case of china abstract carbon emission rights allocation affects the effective operation of carbon trading system and then the achievement of energy saving and emissions reduction objectives reasonable allocation scheme should meet the principle of justice carbon emission rights allocation based on energy justice is a novel and worth discussing subject this paper explores the optimization of carbon emission rights allocation based on energy justice the justice based model is built with the aid of gini coefficient the way to optimize allocation scheme with constraints of population ecological productive land fossil energy resources and gdp is discussed results show that fossil energy resources and ecological productive land play more important role in the allocation the prime example is inner mongolia its quota percentage change reaches up to 150 01 as the gdp and population growth rate are fixed in a given interval the quota allocation in eastern china shows some interesting results when the gdp growth rate is 6 25 the quotas of eastern china will not change with varying population growth rate the allocation will enter a relative stable stage as the population growth rate is greater than or equal to 6 4 these results can provide china with experience to deal with the new problem appeared in carbon trading system like two children policy and the new normal of economic growth

on marginal risk behavior this paper examines marginal risk behavior in a decision theoretic setting that is sufficiently general to accommodate any decision making model representable by a certainty equivalent the analysis shows that risk aversion in its usual sense is a special case of marginal risk aversion associated with mean preserving changes in gambles thus marginal risk behavior and risk behavior are not inherently different rather they manifest similar behavior evaluated at different gambles the paradox of marginal risk loving risk averters arises from mixing definitions of an increase in risk

the dynamic volatility spillover between european carbon trading market and fossil energy market abstract with the rapid spread of carbon trading in the world the interaction of carbon prices and fossil energy prices has raised growing attention but little research has discussed their time varying correlation and dynamic volatility spillover this paper employs the threshold dynamic conditional correlation dcc generalized autoregressive conditional heteroscedasticity garch model and the full baba engle kraft and kroner bekk garch model to explore these issues for the daily data of european carbon futures prices and the three fossil energy prices coal natural gas and brent oil from january 2 2008 to september 30 2014 the results indicate that first there is significant unidirectional volatility spillover from coal market to carbon market and from carbon market to natural gas market whereas there exists no significant volatility spillover between carbon market and brent oil market second carbon market and fossil energy markets have significantly positive correlation across time specifically among the three fossil fuels coal market has the highest correlation with carbon market followed by natural gas and brent oil markets finally as for the three fossil fuels their price decrease may have stronger impact on carbon price volatility than their price increase with the same degree while there is asymmetric impact of carbon price increase and decrease only on brent oil price volatility these results may help investors to well configure their portfolios and manage their investment risks and help emission trading installations to join in carbon market in a cost effective way

monotone comparative statics under uncertainty this paper analyzes monotone comparative statics predictions in several classes of stochastic optimization problems the main results characterize necessary and sufficient conditions for comparative statics predictions to hold based on properties of primitive functions that is utility functions and probability distributions the results apply when the primitives satisfy one of the following two properties i a single crossing property which arises in applications such as portfolio investment problems and auctions or ii log supermodularity which arises in the analysis of demand functions affiliated random variables stochastic orders and orders over risk aversion

a definition of uncertainty aversion a definition of uncertainty or ambiguity aversion is proposed it is argued that the definition is well suited to modelling within the savage as opposed to anscombe and aumann domain of acts the defined property of uncertainty aversion has intuitive empirical content behaves well in specific models of preference multiple priors and choquet expected utility and is tractable tractability is established through use of a novel notion of differentiability for utility functions called eventwise differentiability

theoretical models of sales promotions contributions limitations and a future research agenda our objective in this paper is to review theoretical models of sales promotions we highlight the key contributions of these models discuss their limitations and outline an agenda for future research managerial questions examined in these models include some very fundamental issues such as why firms resort to the use of sales promotions in mature markets and why the use of sales promotions has increased dramatically during the last two decades also included in this review are models that address firm level strategic issues such as the allocation of dollars between advertising and sales promotions and the relative emphasis on trade promotions vis a vis consumer promotions we also review theoretical models that explain how consumers respond to price promotions and what type of sales promotion tools may be superior to others in a particular market the review concludes with a possible agenda for future research

asymmetric risk spillover between financial market uncertainty and the carbon market a gas dcs copula approach abstract a thorough understanding the asymmetry in risk transferring mechanisms remains a challenge in the carbon market through the incorporation of the asymmetric tail distribution into the risk transferring mechanism the asymmetric response of the carbon market to financial market uncertainties can be explored herein we propose a generalized autoregressive score dynamic conditional score copula model to investigate the asymmetric risk spillover between financial market uncertainty and the carbon market we discover the existence of considerable asymmetric risk spillover from financial market uncertainty to the carbon market specifically the upper tail risk spillover effect is greater than the lower tail risk spillover effect the degree of risk spillover reached a peak during the european debt crisis also higher degrees of financial market uncertainty and especially uncertainty from the crude oil market cause a greater risk spillover to the carbon market than lower degrees of financial market uncertainty do in addition we discover that stock market uncertainty exhibits greater power than crude oil market uncertainty in transferring risk to the carbon market when systemic events occur our research provides meaningful information to investors and policy makers

first order risk aversion and the equity premium puzzle abstract this paper integrates yaari s dual theory of choice under uncertainty into a multiperiod context and examines its implications for the equity premium puzzle an important property of these preferences is that of first order risk aversion which implies in our model that the risk premium for a small gamble is proportional to the standard deviation rather than the variance since the standard deviation of the growth rate in aggregate consumption is considerably larger than its variance the model can generate both a small risk free rate and a moderate equity premium