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Notes - A Comparison of Original Costs and Trended Original Cost Ratemaking Methods

Robert E. Anderson and David E. Mead

Year: 1983
Volume: Volume 4
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No2-11
No Abstract









Prices that Clear the Air: Energy Use and Pollution in Chile and Indonesia

Gunnar S. Eskeland, Emmanuel Jimenez and Lili Liu

Year: 1998
Volume: Volume19
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol19-No3-5
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Abstract:
Emission reductions could be provided by cleaner technologies as well as substitution towards less polluting inputs and goods. We develop a model to assess the scope for emission reductions by input substitution. We then apply the model to manufacturing in Chile and Indonesia-two developing countries considering air pollution control strategies. We estimate substitutability in input demand in manufacturing--using standard techniques-and combine these with emission factors to assess the potential for emission reductions via demand' changes. For sulphur oxides (SO) and suspended particulates (TSP), emission elasticities with respect to the price of heavy fuels range from -0.4 to -1.2. A price increase of 20 percent would reduce emissions of SOx, and TSP by 8 to 24 percent. While these results indicate how emissions can be reduced by presumptive taxes on fuels-clearing the air as well as the markets for energy-such a strategy preferably should be accompanied by other instruments that stimulate cleaner technologies. Similarly, emission standards should be accompanied by presumptive taxes on goods and inputs. Emission taxes, if feasible, optimally combine inducements along both avenues.



Carbon Tax or Carbon Permits: The Impact on Generators Risks

Richard Green

Year: 2008
Volume: Volume 29
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol29-No3-4
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Abstract:
Volatile fuel prices affect both the cost and price of electricity in a liberalized market. Generators with the price-setting technology will face less risk to their profit margins than those with costs that are not correlated with price, even if those costs are not volatile. Emissions permit prices may respond to relative fuel prices, further increasing volatility. This paper simulates the impact of this on generators� profits, comparing an emissions trading scheme and a carbon tax against predictions for the UK in 2020. The carbon tax reduces the volatility faced by nuclear generators, but raises that faced by fossil fuel stations. Optimal portfolios would contain a higher proportion of nuclear plant if a carbon tax was adopted.



Gasoline Demand with Heterogeneity in Household Responses

Zia Wadud, Daniel J. Graham and Robert B. Noland

Year: 2010
Volume: Volume 31
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol31-No1-3
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Abstract:
Fuel demand elasticities to determine consumer responses to tax increases or price shocks are typically based on aggregate data. The literature generally provides one elasticity estimate for each country, assuming similar response for all households. However, it is possible that different households can have different responses to the same stimuli depending on the household characteristics. Assuming a single elasticity for all households may fail to capture the detailed distributional effect on different socio-economic groups, which is often needed to fully understand the impact of fuel tax measures. This paper presents results from a household level gasoline demand model which accommodates variation in price and income elasticity with increasing income as well as for different socio-economic characteristics in the USA. We find substantial heterogeneity in price and income elasticities based on demographic groupings and income groups. Results of a distributional analysis for a gasoline tax are also presented using the heterogeneous responses.



Fuel Prices and Station Heterogeneity on Retail Gasoline Markets

Justus Haucap, Ulrich Heimeshoff, and Manuel Siekmann

Year: 2017
Volume: Volume 38
Number: Number 6
DOI: 10.5547/01956574.38.6.jhau
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Abstract:
We empirically investigate how and why price levels differ across gasoline stations, using the first full year from a novel panel data set including price quotes from virtually all gas stations in Germany. Our analysis specifically explores the role of station heterogeneity in explaining price differences across gasoline stations. Key determinants of price levels are found to be ex-refinery prices as key input costs, a station's location on roads or highway service areas, and brand recognition. A lower number of station-specific services implies lower fuel price levels, as does a more heterogeneous local competitive environment.



Export Growth - Fuel Price Nexus in Developing Countries: Real or False Concern?

Kangni Kpodar, Stefania Fabrizio, and Kodjovi Eklou

Year: 2022
Volume: Volume 43
Number: Number 3
DOI: 10.5547/01956574.43.3.kkpo
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Abstract:
This paper investigates the impact of domestic fuel price increases on export growth in a sample of 77 developing countries over the period 2000-2014. Using a fixed-effect estimator and the local projection approach, we find that an increase in domestic gasoline or diesel price adversely affects real non-fuel export growth, with the impact phasing out within two years after the shock. The impact is mainly noticeable in countries with a high-energy dependency ratio and where access to electricity is limited. Further, large fuel price shocks do not seem to lead to disproportionately large changes in exports, suggesting that neither the gradualism nor the shock therapy approach in fuel subsidy reforms dominates. In countries where the export sector is vulnerable to fuel price shocks, appropriate mitigating measures should be designed to smooth the transition to higher fuel prices.



Competition and Competitors: Evidence from the Retail Fuel Market

Xulia González and María J. Moral

Year: 2023
Volume: Volume 44
Number: Number 6
DOI: 10.5547/01956574.44.6.xgon
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Abstract:
Policy makers and antitrust authorities are concerned about the lack of competition in the fuel retail market and its impact on consumer prices. The aim of this article is to empirically evaluate the role of the intensity of competition and competitors' brand affiliation on retail fuel prices. To this end, we use a panel data set with detailed daily on nearly 8,500 gas stations and 2 million price observations; we estimate a reduced-form fuel price equation that accounts for supply (input costs and local competition) and demand shifters (income, traffic intensity, and location) as well as for brand and time fixed effects. We use an instrumental variable estimation strategy, to account for the endogeneity of the intensity of competition. Our results show that premium brands and low-cost brands affect the prices of rival firms in an opposite way. On the one hand, premium brands soften competition in the local markets where they operate and thereby allow their rivals to set higher prices. Besides, price setting by premium-brand stations react differently depending on whether the nearest rival sells the same brand (a friendly competitor) or some other brand. By contrast, low-cost brands contribute to reducing prices through their own prices (direct effect), thereby encouraging competitors to lower their prices (indirect effect). Our results suggest that regulation limiting the entry of premium operators whilst promoting the entry of low cost gas stations will enhance competition at the retail level.





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