scholarly journals A Theoretical Approach to Welfare-Optimal Calculation of Direct Costs in European Rail Regulation

2021 ◽  
Vol 11 (1) ◽  
Author(s):  
Marco Henseler
Keyword(s):  
Allocative Efficiency ◽  
Welfare Economic ◽  
Direct Costs ◽  
Economic Effects ◽  
Specific Situation ◽  
The European Union ◽  
Second Best ◽  
Marginal Costs ◽  
Economic Concept ◽  
Access Charges

The regulation of track access charges within the European Union is based on the economic principles of first and second best pricing. In order to obtain an allocative efficiency it is crucial to determine the marginal costs of operating the train services – the so-called direct costs. Even though the Implementing Regulation (EU) 2015/909 specifies the modalities for the calculation of direct costs, a broad range of different values for direct costs can be observed across Member States. However, the discussion of the level of direct costs is driven in particular by econometric, engineering and cost accounting aspects – an economic analysis is missing despite the welfare-economic concept of track access charges. For that reason, this paper discusses the welfare economic effects of different suitable values for direct costs.It will be shown that both a welfare maximising first best track access charging and, in most cases, also a second best charging will result in boundary solutions for direct costs. However, it also becomes obvious that from a welfare-economic perspective there is no general recommendation for adopting the lowest suitable direct costs. Any allocatively efficientregulation of track access charges must consequently consider the specific situation of each market segment separately.

Regulierte Netzzugangsentgelte in der Elektrizitätswirtschaft und gesellschaftliche Wohlfahrt

2008 ◽  
Vol 59 (1) ◽  
pp. 1-22
Author(s):  
Christoph Bier ◽  
Dieter Schmidtchen
Keyword(s):  
Value Chain ◽  
Third Party ◽  
The European Union ◽  
Essential Information ◽  
Second Best ◽  
Playing Field ◽  
Electricity Grids ◽  
Welfare Implications ◽  
Access Charges

SummaryCompanies active in electricity generation or supply that also own transmission or distribution network assets are generally presumed to have an economic interest in using its monopoly position as network owner to prevent or hinder competition in other areas of the value chain. This can happen in many ways such as raising rivals’ costs, price squeezes or by providing essential information only to affiliated companies. All of these practices distort a level playing field. In order to limit the risk of such behavior from occurring Member States of the European Union introduced a “regulated third party access” regime under which third parties have a right to access the network in a non-discriminatory manner. It is the purpose of the paper to derive the welfare implications of a regulation of access charges for electricity grids taking the costs of transmission as a benchmark. It shows that a cost-based regulation is second-best optimal only if the gap between the incumbent’s and the downstream entrant’s efficiency is sufficiently large. In all other cases an access charge deviating from the transmission costs is second-best optimal. There is no simple and generally applicable rule for the determination of second-best optimal access charges.

scholarly journals Increasing Block Tariffs in the Water Sector – An Interpretation in Terms of Social Preferences

2017 ◽  
Vol 17 (3) ◽  
Author(s):  
Georg Meran ◽  
Christian von Hirschhausen
Keyword(s):  
Social Preferences ◽  
Allocative Efficiency ◽  
Welfare Economic ◽  
Alternative Interpretation ◽  
Household Size ◽  
Inequality Aversion ◽  
Marginal Costs ◽  
Competition And Cooperation ◽  
Poor Households ◽  
Increasing Block Tariffs

AbstractMany developing countries around the world apply progressive water tariffs, often structured in the form of discretely increasing block tariffs (IBTs). These tariffs have been criticized in the welfare economic literature due to their perceived inefficiency: many of the prices charged under IBTs do not correspond to marginal costs and thus violate the principle of allocative efficiency. In this paper we explore an alternative interpretation of the widespread use of IBTs, in terms of social preferences and fairness considerations. For this, we rely on an extension of the Fehr, E., and K. Schmidt (1999. “A Theory of Fairness, Competition, and Cooperation.”Quarterly Journal of Economics114: 817–868.) utility function, including inequality aversion, to which we add another parameter representing a reference for redistribution which reflects a societal preference to correct for income difference perceived as unfair. Additionally, the model includes a variable on household size, finding that, as poor households are on average larger, a simple IBT tariff disregarding household size may not be “fair”.

scholarly journals The Economic Effects of COVID-19 on the Producers of Ethanol, Corn, Gasoline, and Oil

2020 ◽  
Vol 18 (2) ◽  
Author(s):  
Andrew Schmitz ◽  
Charles B. Moss ◽  
Troy G. Schmitz
Keyword(s):  
United States ◽  
Cost Benefit ◽  
Economic Cost ◽  
The United States ◽  
Welfare Economic ◽  
Economic Effects ◽  
Economic Losses ◽  
Corn Ethanol ◽  
Empirical Estimation ◽  
Total Oil

AbstractThe COVID-19 crisis created large economic losses for corn, ethanol, gasoline, and oil producers and refineries both in the United States and worldwide. We extend the theory used by Schmitz, A., C. B. Moss, and T. G. Schmitz. 2007. “Ethanol: No Free Lunch.” Journal of Agricultural & Food Industrial Organization 5 (2): 1–28 as a basis for empirical estimation of the effect of COVID-19. We estimate, within a welfare economic cost-benefit framework that, at a minimum, the producer cost in the United States for these four sectors totals $176.8 billion for 2020. For U.S. oil producers alone, the cost was $151 billion. When world oil is added, the costs are much higher, at $1055.8 billion. The total oil producer cost is $1.03 trillion, which is roughly 40 times the effect on U.S. corn, ethanol, and gasoline producers, and refineries. If the assumed unemployment effects from COVID-19 are taken into account, the total effect, including both producers and unemployed workers, is $212.2 billion, bringing the world total to $1266.9 billion.

scholarly journals Investigating the status of transgenic crops in Iran in terms of cultivation, consumption, laws and rights in comparison with the world

2021 ◽  
Vol 11 (1) ◽  
Author(s):  
Abolfazl Baghbani-Arani ◽  
Mona Poureisa ◽  
Hossein Alekajbaf ◽  
Rezvan Karami Borz-Abad ◽  
Khodadad Khodadadi-Dashtaki
Keyword(s):  
Transgenic Crops ◽  
Economic Effects ◽  
Food Allergies ◽  
The European Union ◽  
Gm Crop ◽  
Gm Food ◽  
Gm Foods ◽  
The World ◽  
The Status ◽  
Transgenic Technologies

AbstractRecently, there has been a development in transgenic technologies in many countries to meet nutritional needs of increasing worlds҆ population. However, there are some concerns about possible risks in the field of growing genetically modified (GM) food, such as threats of biodiversity and food allergies making their use a challenge. Therefore, the present study was conducted to investigate the economic effects and political scopes of GM foods in production sector and policies made by different countries in the world and Iran. Moreover, essential (practical and legal) solutions and guidelines were provided for production and consumption of GM foods, which are useful for governmental entities, Iranian politicians, and consumers' rights. The latest situation of transgenic crops in the countries with which Iran has the highest exchange of agricultural products (including Turkey, Pakistan, and the European Union (EU)) was also studied. Although, Iran has been one of leading Asian countries not only in the field of transfer of technical knowledge of genetic engineering, but also in development of the specialized knowledge of biosafety, and despite production of several transgenic plant lines by Iranian researchers, unfortunately no GM crop has obtained release and cultivation license except for GM rice that its growing process was banned after change of government. According to findings of this study, in Iran, growing and production process of GM crops does not follow the global trend owing to scientific and legal infrastructures.

China-United Kingdom free trade area

2017 ◽  
Vol 10 (1) ◽  
pp. 111-126
Author(s):  
Shumei Chen ◽  
Dandan Li
Keyword(s):  
United Kingdom ◽  
Free Trade ◽  
Free Trade Area ◽  
Economic Effects ◽  
The European Union ◽  
Content Type ◽  
Trade Area ◽  
Simulation Results ◽  
The Uk ◽  
Trade Analysis

Purpose The purpose of this paper is to predict the likely economic effects of a free trade area (FTA) on both China and the United Kingdom (hereafter the UK). Design/methodology/approach Following literature review and trade relationship briefing, this paper uses the Global Trade Analysis Project simulation to predict the economic effects of such a FTA on both China and the UK. Findings The simulation results indicate that a China-UK free trade area (hereafter CUFTA) will bring more benefits than harm to both China and the UK, and achieving zero tariff or reducing technological barriers to trade (TBT) is mutually beneficial for both China and the UK, with the growth in GDP, economic welfare as well as import and export. Combining zero tariff and the reduction of TBT in exceptional departments is the most favorable way to improve the macroeconomic effects without bringing damaging effects on the comparative disadvantage industries such as transport equipment, chemicals industries for China and textiles and apparel industry for the UK. Originality/value After the UK voted to leave the European Union, CUFTA is put on the agenda by both the governments, yet there are fewer studies on CUFTA, with this paper being one of the early trials. Besides, based on the simulation results, some policy suggestions will be put forward for future negotiations and industrial policies’ adjustment.

scholarly journals Medium Term Analysis of Technical and Allocative Efficiency in Romanian Farms Using FADN Dataset

2017 ◽  
Vol 74 (1) ◽  
pp. 83
Author(s):  
Nicola GALLUZZO
Keyword(s):  
Technical Efficiency ◽  
New Technologies ◽  
Allocative Efficiency ◽  
The European Union ◽  
Data Network ◽  
Rural Space ◽  
Annual Survey ◽  
Farm Accountancy Data Network ◽  
Agricultural Areas ◽  
The Impact

The Farm Accountancy Data Network is an annual survey proposed by the European Union in order to estimate the impact of the Common Agricultural Policy on farmers. Lots of scholars have investigated the technical, economical and allocative efficiency using a non parametric approach such as the Data Envelopment Analysis (DEA) in Romanian farms throughout the Farm Accountancy Data Network dataset pointing out poor levels of technical efficiency, which were lower than the average European value. The purpose of this study was to assess using DEA approach technical, economic and allocative efficiency in Romanian farms part of the FADN dataset over six year time from 2007 to 2012. Findings pointed out an increase of technical efficiency compared to previous studies, as a consequence of a significant turn over of a younger high skill and qualified farmers generation. Poor land capital, in terms of utilized agricultural areas, connected to an increase of new technologies, was the downside of Romanian farms and this implied that the National Rural Development Plan should  have taken into account financial subsides in order to implement agricultural areas scattered in Romanian rural space. 

Die Bedeutung der EuGH-Rechtsprechung für die Nachfrage nach Gesundheitsleistungen in der EU

2003 ◽  
Vol 52 (3) ◽  
Author(s):  
Jörg Jasper ◽  
Ralf Tostmann
Keyword(s):  
Health Care ◽  
National Health ◽  
Health Care Systems ◽  
Economic Effects ◽  
Advanced Technology ◽  
The European Union ◽  
National Health Care ◽  
European Court ◽  
Care Systems ◽  
Principle Of Territoriality

AbstractIn this paper we analyze the economic effects of the European Court of Justice’s (CoJ’s) jurisdiction on national health care systems in Europe, especially in Germany. We focus on the CoJ’s decisions concerning European patients’ rights to choose freely among suppliers of medical treatment within the European Union. The results are that national health care systems will face an increasing pressure to comply with the rules of the European Treaty. For Germany, this means that some traditional traits of its regulatory framework, especially the principle of territoriality, will have to undergo a test of “Europe-friendliness”. Unlike these qualitative aspects, we find that quantitative effects will remain more or less negligible for the nearer future and will mostly be confined to the sector of advanced technology medicine.

Asymmetric Networks and Access Charges

2019 ◽  
Vol 10 (01) ◽  
pp. 1950005
Author(s):  
Alexander Correa
Keyword(s):  
Mathematical Model ◽  
Social Welfare ◽  
Market Entry ◽  
Low Cost ◽  
Regulatory Regime ◽  
Marginal Costs ◽  
Asymmetric Networks ◽  
Access Charges ◽  
Firm Asymmetry ◽  
Asymmetric Regulation

In order to suggest an appropriate regulatory regime in the context of firm asymmetry, this study has developed a mathematical model that allows to elucidate comparisons of three different regulatory scenarios. In the unregulated market, the low-cost firm is more likely to become dominant in the market. Symmetric regulation has an immediate effect on off-net prices, which fall to the level of its marginal costs. Finally, asymmetric regulation is a highly effective way of promoting market entry. Asymmetric regulation can generate higher social welfare.

Sign in / Sign up

Export Citation Format

Share Document