residential peak electricity demand response highlights of some behavioural issues electricity demand response refers to consumer actions that change the utility load profile in a way that reduces costs or improves grid security the focus of demand response has mainly been on the commercial and big industrial sectors because of the large demand reduction that they can offer to the utility grid operators utilities are showing increasing interest in residential demand response rdr rdr can be treated as an energy resource which can be assessed and commercially developed however there are still some issues that remain to be addressed for rdr to be successful these include price unresponsiveness of some residential consumers equity issues and high cost of the metering infrastructure the aim of this paper is to investigate and present some of the challenges in achieving effective voluntary demand reduction based on a review of residential demand response literature as well as the general residential energy use behaviour literature the authors propose the use of a hybrid engineering approach using social psychology and economic behaviour models to overcome these challenges and realize the benefits of supply security and cost management

consumer demand and the life cycle allocation of household expenditures the purpose of this paper is to estimate the parameters of household preferences that determine the allocation of goods within the period and over the life cycle using micro data in doing so the authors are able to identify important effects of demographics labor market status and other household characteristics on the intertemporal allocation of expenditure they test the validity of the life cycle model using excess sensitivity tests and find that controlling for demographics and labor market status variables can largely explain the excess sensitivity of consumption to anticipated changes in income

manufacturers and retailers in the global economy we develop a general equilibrium model to capture key features of the retailing and of the manufacturing industry in order to understand how these two industries interact and how labor is allocated between them we show that the observed shift in employment from manufacturing to retailing the rise in retailer product assortment and the emergence of slotting allowances in many retail markets are consistent with the global integration of product markets while higher retail market concentration is best explained by technological change in retailing we also identify a novel benefit from market integration consisting of efficiency gains in the vertical distribution chain

multifirm unions and the incentive to adopt pattern bargaining in oligopoly abstract this paper develops a model of wage bargaining between an industry wide trade union and firms in an oligopoly and considers the circumstances under which the union prefers pattern bargaining that is negotiating contracts in a sequential manner to simultaneous bargaining with the firms the paper goes on to consider the importance of the bargaining order in pattern bargaining when the firms are asymmetric the analysis shows that the union gains by first targeting a firm which is in a relatively weak bargaining position i e impatient to settle or a firm with relatively large profits

real time pricing when some consumers resist in saving electricity successful real time electricity pricing depends firstly upon consumers willingness to subscribe to such terms and secondly on their ability to curb consumption levels the present paper addresses both issues by considering consumers differentiated by their electricity saving costs half of whom resist saving electricity we demonstrate that when consumers are free to adopt real time prices producers prefer charging inefficient prices and in so doing discriminate against that portion of the consumer population which faces no saving costs we also find that efficient marginal cost pricing is feasible but is incompatible with mass adoption of real time prices

countervailing power revisited abstract the paper uses the nash bargaining concept to study the predictions of the theory of countervailing power within two theoretical models a cournot model and a model of perfect competition within the cournot model a decrease in the number of retailers unambiguously leads to an increase in equilibrium consumer prices in the model of perfect competition the reverse is true one may thus conclude that countervailing power can have positive effects for the consumers only if competiton at the retail level is very fierce

international structural adjustment and its sectoral and spatial impacts structural economic adjustment has relevance and significance in oecd countries among the countries in transition from socialism to capitalism and in the developing countries of asia africa and latin america its impacts are multi institutional being in firms government agencies non government organisations and households institutions are having to innovate to adapt and to reorganise to meet rapidly changing economic conditions in an increasingly competitive environment this article evaluates the structural adjustment process it will establish general principles for interpretation and for a newly emerging dominant political economy the new political economy npe in which adjustment is being articulated the npe is evolving being influenced by the post 1990 enhanced relevance of social and environmental issues adding to the neoliberalism characteristics of the early origins of the npe also the npe is being infused with intellectual institutionalism especially the new institutional econom

has democratization reduced infant mortality in sub saharan africa evidence from micro data does democracy help babies survive in sub saharan africa by using retrospective fertility surveys conducted in 28 african countries i compare the survival of infants born to the same mother before and after democratization to disentangle the effect of democracy from that of changes in population characteristics which is infeasible with country level statistics on infant mortality i find that infant mortality falls by 1 2 percentage points 12 of the sample mean after democratization in the post cold war period relevant aspects of democracy appear to be the combination of multiparty elections and leadership change

the price elasticity of electricity demand in south australia abstract in this paper the price elasticity of electricity demand representing the sensitivity of customer demand to the price of electricity has been estimated for south australia we first undertake a review of the scholarly literature regarding electricity price elasticity for different regions and systems then we perform an empirical evaluation of the historic south australian price elasticity focussing on the relationship between price and demand quantiles at each half hour of the day this work attempts to determine whether there is any variation in price sensitivity with the time of day or quantile and to estimate the form of any relationships that might exist in south australia

the hourly income elasticity of electricity using a detailed data set on appliance level electricity consumption at the hourly level we provide the first estimates of hourly and end use specific income elasticities for electricity such est

death rates life expentancy and china s economic reforms a critique of a k sen abstract sen s recent work has emphasized the ineffectiveness of economic growth in achieving fundamentally important human ends here his influential propositions concerning post mao china are assessed factors affecting mortality rates and life expectancy in china since the mid 1970s are discussed in section 2 in section 3 it is shown that contrary to his claims post mao china achieved a widespread decline in death rates an improvement in life expectancy and a reduction in the number of people living in absolute poverty the poorest rural households were not excluded from the benefits of rapid growth of output after the reforms

vertical integration and vertical restraints this paper surveys the field of vertical integration and vertical restraints with particular reference to implications for competition policy it outlines the existing legal framework then discusses some particular u k examples involving vertical restraints the theoretical discussion includes analyses of technological economies transactions costs contractual rights monopoly effects verticle restraints as externalities interbrand versus intrabrand competition the strategic effects of vertical separation and agency issues some policy implications are drawn amongst these being the points that vertical linkages can have strong anticompetitive effects that there is little support for separate treatment of resale price maintenance that policy should focus on economic effects rather than legal form that the case for the block exemption of franchising in the ec is unclear and that the law has failed to take the implications of the vertical separation literature into account copyright 1993 by oxford university press

divesting ownership in a rival we examine the consumer welfare effect of a firm s partial ownership of a competitor and compare the implications of alternative forms of divestiture we identify conditions under which turning voting shares into non voting shares is preferable to selling the shares to the firm s current shareholders an option frequently chosen we also show that selling the voting shares to a large independent shareholder is preferable to selling them to small shareholders we provide additional theoretical results and apply them to the divestiture of portugal telecom s holdings in ptm

real time pricing of electricity for residential customers econometric analysis of an experiment under real time pricing a network operator sets the price level for a period according to a predefined scheme which depends on the state of demand and costs and announces this price shortly before the period begins the french state owned electric utility experimented with a six rate real time tariff which divides the year into three types of days and each day into two periods the number of days of each type is known in advance to the consumer but the type of any particular day is announced only at the end of the preceding day in order to evaluate the responsiveness of customers to this pricing option we estimate the frisch demand functions for daily electricity consumption derived from a simple dynamic model based on an additively separable intertemporal utility function as the marginal utility of expenditure which enters the frisch demands follows a known stochastic process the econometric model has a state space representation we can then apply the kalman filter to compute the log likelihood function associated with each consumer s time series of electricity consumption the main result of the analysis is that the real time tariff improves the welfare of a majority of consumers participating in the experiment

funding self sustaining development the role of aid fdi and government in economic success this article challenges a long held development policy assumption that aid and foreign direct investment fdi serve as substitutes or complements in accelerating the development of the world s poorer countries we show both theoretically and empirically that aid and fdi affect development differently aid contributes powerfully to both economic growth and human development and the higher the level of human capital in a country the more aid contributes by contrast fdi at best has no effect on economic growth and actually slows the rate of human development in less developed countries we find no evidence that the degree of democratic responsiveness in government conditions the effectiveness of either aid or fdi although we do find that democracy independently increases human development in all but the most developed countries our results demonstrate that fdi and aid are not and cannot be substitutes in the development of the world s poorer countries nor even can they be thought of as complements certainly not at mid to low levels of development in the end poor countries need democracy and aid not fdi we are extremely grateful to susan rose ackerman gustav ranis frances rosenbluth kenneth scheve and participants at the leitner political economy seminar at yale university in december 2003 for very helpful comments we also received valuable suggestions from two anonymous reviewers stephen kosack would like to thank the national science foundation for the support of a graduate research fellowship

buyers miscoordination entry and downstream competition this article shows that buyers coordination failures might prevent entry in an industry with an incumbent firm and a more efficient potential entrant if there were a single buyer or if all buyers formed a central purchasing agency coordination failures would be avoided and efficient entry would always occur more generally exclusion is less likely the lower the number of buyers for any given number of buyers exclusion is less likely the more fiercely buyers compete in the downstream market first intense competition may prevent miscoordination equilibria from arising second in cases where miscoordination equilibria still exist it lowers the maximum price that the incumbent can sustain at such exclusionary equilibria buyers have experienced increased concentration in many sectors in particular grocery retailing 1 2 this trend has triggered a wide debate on the effects of buyer power 3 we contribute to this debate by studying how concentration and competition among buyers affect the possibility of entry by a new upstream supplier in an industry characterised by scale economies in our model buyers fragmentation may lead to a situation where a new upstream firm does not manage to enter a market although endowed with lower marginal costs than an incumbent firm when several buyers decide independently from which supplier to purchase miscoordination equilibria may arise where all buyers buy from the incumbent even if the entrant sets a lower price if all buyers address the incumbent none of them has an incentive to deviate that is to switch to the entrant anticipating that a single order would not allow the

bilateral oligopoly the efficiency of intermediate goods markets abstract we show that intermediate goods markets may be efficient despite the presence of commonly accepted signs of market failure such as high concentration both among sellers and buyers sparse trading networks price dispersion and externalities the results are derived in an extensive form model of bilateral bargaining with multiple buyers and multiple sellers and with externalities between the negotiations we also characterize the structure of the endogenous trading network i e how firms choose trading partners prices are dispersed and depend on both the concentration of capital and the concentration of sales consistent with some stylized facts on buyer power

a disaggregated nonhomothetic modeling of responsiveness to residential time of use electricity rates in addition to quantifying the load impacts of time differentiated rates on aggregate peak off peak groupings a very finely disaggregated rotterdam demand system is described and estimated for explaining changes in detailed features of customers electricity load patterns this linear first difference formulation allows for nonhomotheticity permits an examination of load impacts on critical hours of the week and makes use of both control and time of use data moreover the proposed specification is parameter parsimonious an illustrative use of this model is portrayed through recent empirical evidence from a residential experiment of a northern winter peaking utility in ontario canada copyright 1992 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

bilateral monopolies and incentives for merger the paper presents a model of duopoly in which firms acquire inputs through bilateral monopoly relations with suppliers it combines a bargaining model with a duopoly model to examine how input pri

food and freedom the links between food and freedom at first appear rather remote to policymaking and far from central and practical concerns the lecture discusses important connections between the two that need to be recognized more fully as background to practical food policy although ethics specifically freedom seems far less compelling a concept than concrete demands of food the contrast is artificial the provision of food is a central issue in general social ethics since so much in human life does depend on the ability to find enough to eat in particular the freedom that people enjoy to lead a decent life including freedom from hunger from avoidable morbidity from premature mortality etc is centrally connected with the provision of food and related necessities also the compulsion to acquire enough food may force vulnerable people to do things they resent doing and may make them accept lives with little freedom thus the role of food in fostering freedom can be extremely important on the other side freedom may also causally influence the success of the pursuit of food one consideration that has received a great deal of attention relates to the role of freedom to make profits by providing incentives for the expansion of food production this consideration has often cropped up in the critical evaluation of agricultural policies pursued in many countries in africa and asia the lecturer supplements the conceptual and theoretical discussions with practical illustrations

does responsive pricing smooth demand shocks using data from a unique pricing experiment we investigate vickrey s conjecture that responsive pricing can be used to smooth both predictable and unpredictable demand shocks our evidence shows that increasing the responsiveness of price to demand conditions reduces the magnitude of deviations in capacity utilization rates from a pre determined target level a 10 increase in price variability leads to a decrease in the variability of capacity utilization rates between 2 and 6 we discuss implications for the use of demand side incentives to deal with congestible resources

the length of life and the standard of living economic influences on premature death in china a detailed survey of mortality is used to analyse the determinants of premature death in rural china premature death is found to be inversely related to income higher income in a county reduces its mortality rate ceteris paribus the inverse relationship is found for most major illnesses and might be explained by the large element of self reliance in the funding of health care expenditures in china both at the household and the local levels these and other results are used to address the basic question why has there been a remarkable decline in premature mortality in china since the early 1950s the contributions of income of deliberate health care policies and of collective organisation are examined

industrial response to electricity real time prices short run and long run i introduction with the emergence of competition in the electric industry wholesale prices are proving highly volatile during the summers of 1998 and 1999 prices in the midwest soared to 7000 or more per megawatt hour compared to a typical summer price of 30 50 one factor contributing to this volatility is that relatively few retail customers pay real time prices rtps that vary with changing supply and demand conditions as a result retail use is not deterred by the spikes in wholesale price exacerbating wholesale volatility without providing an opportunity for retail response there will be pressure on policy makers to curb wholesale volatility with such measures as the price caps approved by the federal energy regulatory commission in new york and california as a result of high electricity prices during 2000 increasingly electric utilities now offer their largest industrial and commercial customers hourly prices that vary with changes in real time supply and demand 1 the purpose of this article is to estimate and evaluate the short run and long run factors that influence customer price response to rtps to date there have been relatively few studies of response to rtp rates and those have been largely limited to short run estimates this study advances the research by evaluating how customer response to rtp changes with experience on the rates in addition there is consideration of the sensitivity of price response to changes in the levels of both prices and temperatures finally there is an examination of customer characteristics particularly on site generation that provide flexibility in responding to price changes the data include 110 industrial customers served by duke power a division of duke energy corporation some of the participating customers have been on rtp rates for as long as six years utilities need information on short run response to know the magnitude of demand relief that price responsiveness may provide when capacity is tight as well as to determine unit commitment and spinning reserve they need long run response to plan additions to capacity knowledge of individual customer response can help utilities target those customers who are most likely to opt for rtp responsive customers may include those with interruptible batch production processes and with on site generation in addition to utilities policy makers need to know price response to determine the role of rtp in achieving efficient electric resource use 2 this study adopts the modeling and estimation procedures set forth by herriges et al 1993 and king and shatrawka 1994 both employed a nested constant elasticity of substitution ces functional form herriges et al 1993 estimated response to an rtp rate offered by the niagara mohawk company at the time there were only 15 customers with usable data one strength of the study was the availability of a control group on non rtp rates king and shatrawka 1994 employed a much larger sample of 150 customers served by the midlands electric company great britain but did not have a control group both studies provided shortrun estimates only patrick and wolak 1997 also used midlands data to estimate demand elasticities from a generalized mcfadden functional form though their findings appear to be consistent with the other studies it is difficult to compare their results directly given the differing functional form 3 their study used several years of data and did include temperature but provided only short run estimates additionally there were no consistent findings regarding temperature their study proposed the analysis of customer learning for future work 4 o sheasy 1997 and gupta and danielson 1998 have raised the possibility that price response depends on the level of price o sheasy 1997 suggests a demand curve with vertical segments over certain price ranges

the nash bargaining solution in vertical relations with linear input prices abstract we re examine the nash bargaining solution when an upstream and n downstream firms bargain over a linear input price with unobservable contracts we show that the profit sharing rule is given by a simple and instructive formula which depends on the parties disagreement payoffs the profit weights in the nash product and the elasticity of derived demand a downstream firm s profit share increases in the equilibrium derived demand elasticity which in turn depends on the final goods demand elasticity

effective aid how democracy allows development aid to improve the quality of life abstract research into foreign aid has mostly focused on its ability to affect economic i e gdp per capita growth conclusions have been mixed i consider aid s effectiveness differently by its ability to improve quality of life i find that though aid does not affect quality of life in the aggregate it is effective when combined with democracy and ineffective and possibly harmful in autocracies the results suggest that aid would be more effective if it were combined with efforts to encourage democratization

countervailing power and consumer prices this paper considers the importance of countervailing power manifested as the effects of increased retail concentration on consumer prices and welfare within a market setting where imperfectly competitive retailers negotiate intermediate prices with a monopoly supplier only when retailer services are regarded as very close substitutes do final prices fall following a reduction in the number of retailers even in these circumstances the social benefits of countervailing power may not be realised as the supplier may seek to protect its profits by using a refusal to supply restraint to engage in exclusive trading

multiunit bargaining in oligopolistic industries a model of wage determination in unionized oligopolistic industries is developed and used to compare the outcome of collective bargaining under two different bargaining structures one in which the workers of each firm are represented by separate and independent unions local bargaining and one in which a national union represents all workers in the industry in both cases the bargaining problem has a unique outcome with industrywide bargaining resulting in higher wages in addition industrywide unions are inherently stable in that there are no incentives for independent unions to attempt to cheat on the collusive agreement

public investment social services and productivity of chinese household farms this article examines the impact of village sponsored infrastructural investment and social services on the productivity of chinese farm households using detailed farm level data for the period 1986 90 the main findings are that the public facilities and services provided by village collectives augmented productivity growth of farm households and that the expenditures on public good activities in the sample villages were below the optimal level the problems of under investment in public projects were particularly acute in low income villages

buying power and strategic interactions this paper shows that buying power at the retail level can lead to a rise in wholesale price as a result retailers without buying power may increase their retail price nevertheless total surplus is non decreasing in the degree of buying power possessed by the dominant retailer jel classification l13 pouvoir d achat et interactions strategiques ce memoire montre que le pouvoir d achat au niveau du commerce de detail peut mener a un accroissement dans les prix de gros en consequence les detaillants qui n ont pas de pouvoir d achat peuvent accroitre leurs prix au detail neanmoins le surplus total ne decroit pas a mesure que le degre de pouvoir d achat du detaillant s accroit

short and long run time of use price elasticities in swiss residential electricity demand abstract this paper presents an empirical analysis on the residential demand for electricity by time of day this analysis has been performed using aggregate data at the city level for 22 swiss cities for the period 2000 2006 for this purpose we estimated two log log demand equations for peak and off peak electricity consumption using static and dynamic partial adjustment approaches these demand functions were estimated using several econometric approaches for panel data for example lsdv and re for static models and lsdv and corrected lsdv estimators for dynamic models the attempt of this empirical analysis has been to highlight some of the characteristics of the swiss residential electricity demand the estimated short run own price elasticities are lower than 1 whereas in the long run these values are higher than 1 the estimated short run and long run cross price elasticities are positive this result shows that peak and off peak electricity are substitutes in this context time differentiated prices should provide an economic incentive to customers so that they can modify consumption patterns by reducing peak demand and shifting electricity consumption from peak to off peak periods

the competition effects of industry wide vertical price fixing in bilateral oligopoly this paper examines the competition and welfare effects of vertical price fixing through industry wide resale price maintenance rpm arrangements such as those benefiting from exemption from a general prohibition against rpm a bilateral oligopoly framework is employed incorporating differentiation between manufacturer products and between retailer services transactions between the stages involve prices being determined through bargaining we do not find rpm to be universally undesirable however where retailer power is strong the social effects of rpm are likely to be adverse since the practice can assist in coordinating final price levels and prevent socially desirable countervailing power arising

the welfare effects of upstream mergers in the presence of downstream entry barriers we examine the incentives for upstream firms to consolidate horizontally and the impact of this process on industry performance when there are downstream entry barriers and firms negotiate bilaterally in the short run consumers are not worse off with upstream mergers since consolidation only results in a redistribution of industry rents in the long run consumers are better off after upstream mergers since they induce more entry into that segment when social welfare is evaluated a limit on upstream consolidation may prevent excessive entry but upstream entry can be sometimes insufficient if the retailers intrinsic bargaining power is excessive

global water crisis and future food security in an era of climate change food policy should serve humanity by advancing the humane goals of eradicating extreme poverty and hunger however these goals have recently been challenged by emerging forces including climate change water scarcity the energy crisis as well as the credit crisis this paper analyses the overall role of these forces and population growth in redefining global food security specifically global water supply and demand as well as the linkages between water supply and food security are examined the analysis reveals that the water for food security situation is intricate and might get daunting if no action is taken investments are needed today for enhancing future food security this requires action on several fronts including tackling climate change preserving land and conserving water reducing the energy footprint in food systems developing and adopting climate resilient varieties modernising irrigation infrastructure shoring up domestic food supplies reforming international food trade and responding to other global challenges

upfront payments and exclusion in downstream markets although upfront payments are often observed in contracts between manufacturers and retailers little is known about their competitive effects or the role retailers play in securing them in this article we consider a model in which two competing retailers make take it or leave it offers to a common manufacturer we find that upfront payments are a feature of equilibrium contracts and in all equilibria only one retailer buys from the manufacturer these findings support the claims of small manufacturers who argue that they are often unable to obtain widespread distribution for their products because of upfront payments copyright 2007 rand

the response of small and medium size business customers to time of use tou electricity rates in israel this paper reports on the methodology data and results of the israeli time of use tou electricity pricing experiment in the industrial commercial sector we concentrate on the estimation of the demand functions for electricity under tou and the net welfare gains which result from applying tou rates to small and medium size business customers in israel this experiment which was preceded by a 15 month load research study to allow an optimal sample design was concluded in june 1992 the analysis yielded four major conclusions 1 the estimated gains of small and medium size customers in israel from tou rates are sufficient to justify investment in tou metering technology 2 there have been small but noticeable shifts of electricity from the peak to the mid peak if relevant and to the off peak periods during all seasons of the year and particularly during the winter 3 the structure and number of labour shifts during the day and weather are important factors in determining the response of business customers to the tou rates 4 price elasticities vary substantially over the seasons and across sic groups they do not vary with customer size

the economic theory of vertical restraints the types of contracts arising in a typical vertical manufacturer retailer relationship are more sophisticated than a simple uniform price in addition to setting per unit prices manufacturers and retailers also revert to non linear pricing and non price instruments these instruments or contracts are referred to as vertical restraints and can take the form of franchise fees resale price maintenance exclusive dealing exclusive territories and slotting allowances the use and the effects of one type of instrument versus another depend crucially on specific market assumptions upstream and downstream and on the division of bargaining power between manufacturers and retailers this paper surveys the industrial organization literature on retail pricing and shows that vertical restraint instruments have important effects on producer and consumer prices market structure efficiency and welfare

upstream merger in a successive oligopoly who pays the price abstract this study applies a successive oligopoly model with an unobservable non linear tariff between upstream and downstream firms to analyze the possible anti competitive effects of an upstream merger in the norwegian food sector specifically the market for eggs the theoretical predictions are that an upstream merger may lead to higher average prices paid by downstream firms and at the same time no changes in the prices paid by consumers consistent with the theoretical predictions it is found that the merger had no effect on consumer prices but led to higher average prices paid by the downstream firms to the merged firm

buyer power in international markets this paper investigates the implications for international markets of the existence of retailers wholesalers with market power two main results are shown first in the presence of buyer power trade liberalization may lead to retail market concentration due to this concentration retail prices may be higher and welfare may be lower in free trade than in autarky thus reversing the standard effects of trade liberalization second the pro competitive effects of trade liberalization are weaker under buyer power than under seller power