Essays on Energy Economics and Industrial Organization

The dissertation consists of three chapters related to the low-price guarantee marketing strategy and energy efficiency analysis. The low-price guarantee is a marketing strategy in which firms promise to charge consumers the lowest price among their competitors. Chapter 1 addresses the research question "Does a Low-Price Guarantee Induce Lower Prices'' by looking into the retail gasoline industry in Quebec where there was a major branded firm which started a low-price guarantee back in 1996. Chapter 2 does a consumer welfare analysis of low-price guarantees to drive police indications and offers a new explanation of the firms' incentives to adopt a low-price guarantee. Chapter 3 develops the energy performance indicators (EPIs) to measure energy efficiency of the manufacturing plants in pulp, paper and paperboard industry.

Chapter 1 revisits the traditional view that a low-price guarantee results in higher prices by facilitating collusion. Using accurate market definitions and station-level data from the retail gasoline industry in Quebec, I conducted a descriptive analysis based on stations and price zones to compare the price and sales movement before and after the guarantee was adopted. I find that, contrary to the traditional view, the stores that offered the guarantee significantly decreased their prices and increased their sales. I also build a difference-in-difference model to quantify the decrease in posted price of the stores that offered the guarantee to be 0.7 cents per liter. While this change is significant, I do not find the response in comeptitors' prices to be significant. The sales of the stores that offered the guarantee increased significantly while the competitors' sales decreased significantly. However, the significance vanishes if I use the station clustered standard errors. Comparing my observations and the predictions of different theories of modeling low-price guarantees, I conclude the empirical evidence here supports that the low-price guarantee is a simple commitment device and induces lower prices.

Chapter 2 conducts a consumer welfare analysis of low-price guarantees to address the antitrust concerns and potential regulations from the government; explains the firms' potential incentives to adopt a low-price guarantee. Using station-level data from the retail gasoline industry in Quebec, I estimated consumers' demand of gasoline by a structural model with spatial competition incorporating the low-price guarantee as a commitment device, which allows firms to pre-commit to charge the lowest price among their competitors. The counterfactual analysis under the Bertrand competition setting shows that the stores that offered the guarantee attracted a lot more consumers and decreased their posted price by 0.6 cents per liter. Although the matching stores suffered a decrease in profits from gasoline sales, they are incentivized to adopt the low-price guarantee to attract more consumers to visit the store likely increasing profits at attached convenience stores. Firms have strong incentives to adopt a low-price guarantee on the product that their consumers are most price-sensitive about, while earning a profit from the products that are not covered in the guarantee. I estimate that consumers earn about 0.3% more surplus when the low-price guarantee is in place, which suggests that the authorities should not be concerned and regulate low-price guarantees. In Appendix B, I also propose an empirical model to look into how low-price guarantees would change consumer search behavior and whether consumer search plays an important role in estimating consumer surplus accurately.

Chapter 3, joint with Gale Boyd, describes work with the pulp, paper, and paperboard (PP&PB) industry to provide a plant-level indicator of energy efficiency for facilities that produce various types of paper products in the United States. Organizations that implement strategic energy management programs undertake a set of activities that, if carried out properly, have the potential to deliver sustained energy savings. Energy performance benchmarking is a key activity of strategic energy management and one way to enable companies to set energy efficiency targets for manufacturing facilities. The opportunity to assess plant energy performance through a comparison with similar plants in its industry is a highly desirable and strategic method of benchmarking for industrial energy managers. However, access to energy performance data for conducting industry benchmarking is usually unavailable to most industrial energy managers. The U.S. Environmental Protection Agency (EPA), through its ENERGY STAR program, seeks to overcome this barrier through the development of manufacturing sector-based plant energy performance indicators (EPIs) that encourage U.S. industries to use energy more efficiently. In the development of the energy performance indicator tools, consideration is given to the role that performance-based indicators play in motivating change; the steps necessary for indicator development, from interacting with an industry in securing adequate data for the indicator; and actual application and use of an indicator when complete. How indicators are employed in EPA’s efforts to encourage industries to voluntarily improve their use of energy is discussed as well. The chapter describes the data and statistical methods used to construct the EPI for plants within selected segments of the pulp, paper, and paperboard industry: specifically pulp mills and integrated paper & paperboard mills. The individual equations are presented, as are the instructions for using those equations as implemented in an associated Microsoft Excel-based spreadsheet tool.

Referring heroin users from compulsory detoxification centers to community methadone maintenance treatment: a comparison of three models.

BACKGROUND: Both compulsory detoxification treatment and community-based methadone maintenance treatment (MMT) exist for heroin addicts in China. We aim to examine the effectiveness of three intervention models for referring heroin addicts released from compulsory detoxification centers to community methadone maintenance treatment (MMT) clinics in Dehong prefecture, Yunnan province, China. METHODS: Using a quasi-experimental study design, three different referral models were assigned to four detoxification centers. Heroin addicts were enrolled based on their fulfillment to eligibility criteria and provision of informed consent. Two months prior to their release, information on demographic characteristics, history of heroin use, and prior participation in intervention programs was collected via a survey, and blood samples were obtained for HIV testing. All subjects were followed for six months after release from detoxification centers. Multi-level logistic regression analysis was used to examine factors predicting successful referrals to MMT clinics. RESULTS: Of the 226 participants who were released and followed, 9.7% were successfully referred to MMT(16.2% of HIV-positive participants and 7.0% of HIV-negative participants). A higher proportion of successful referrals was observed among participants who received both referral cards and MMT treatment while still in detoxification centers (25.8%) as compared to those who received both referral cards and police-assisted MMT enrollment (5.4%) and those who received referral cards only (0%). Furthermore, those who received referral cards and MMT treatment while still in detoxification had increased odds of successful referral to an MMT clinic (adjusted OR = 1.2, CI = 1.1-1.3). Having participated in an MMT program prior to detention (OR = 1.5, CI = 1.3-1.6) was the only baseline covariate associated with increased odds of successful referral. CONCLUSION: Findings suggest that providing MMT within detoxification centers promotes successful referral of heroin addicts to community-based MMT upon their release.

Police is Dead: On the Birth of Economism

Police is Dead is an historiographic analysis whose objective is to change the terms by which contemporary humanist scholarship assesses the phenomenon currently termed neoliberalism. It proceeds by building an archeology of legal thought in the United States that spans the nineteenth and twentieth centuries. My approach assumes that the decline of certain paradigms of political consciousness set historical conditions that enable the emergence of what is to follow. The particular historical form of political consciousness I seek to reintroduce to the present is what I call “police:” a counter-liberal way of understanding social relations that I claim has particular visibility within a legal archive, but that has been largely ignored by humanist theory on account of two tendencies: first, an over-valuation of liberalism as Western history’s master signifier; and second, inconsistent and selective attention to law as a cultural artifact. The first part of my dissertation reconstructs an anatomy of police through close studies of court opinions, legal treatises, and legal scholarship. I focus in particular on juridical descriptions of intimate relationality—which police configured as a public phenomenon—and slave society apologetics, which projected the notion of community as an affective and embodied structure. The second part of this dissertation demonstrates that the dissolution of police was critical to emergence of a paradigm I call economism: an originally progressive economic framework for understanding social relations that I argue developed at the nexus of law and economics at the turn of the twentieth century. Economism is a way of understanding sociality that collapses ontological distinctions between formally distinct political subjects—i.e., the state, the individual, the collective—by reducing them to the perspective of economic force. Insofar as it was taken up and reoriented by neoliberal theory, this paradigm has become a hegemonic form of political consciousness. This project concludes by encouraging a disarticulation of economism—insofar as it is a form of knowledge—from neoliberalism as its contemporary doctrinal manifestation. I suggest that this is one way progressive scholarship can think about moving forward in the development of economic knowledge, rather than desiring to move backwards to a time before the rise of neoliberalism. Disciplinarily, I aim to show that understanding the legal historiography informing our present moment is crucial to this task.