Energy efficiency in energy policy: Empirical evidence of direct rebound effect in Portuguese households' demand for electricity

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Economics from the NOVA – School of Business and Economics

Growth and Survival Determinants of Chinese Private Firms: Fieldwork evidence and econometric estimates

This paper reports on one of the first empirical attempts to investigate small firm growth and survival, and their determinants, in the Peoples’ Republic of China. The work is based on field work evidence gathered from a sample of 83 Chinese private firms (mainly SMEs) collected initially by face-to-face interviews, and subsequently by follow-up telephone interviews a year later. We extend the models of Gibrat (1931) and Jovanovic (1982), which traditionally focus on size and age alone (e.g. Brock and Evans, 1986), to a ‘comprehensive’ growth model with two types of additional explanatory variables: firm-specific (e.g. business planning); and environmental (e.g. choice of location). We estimate two econometric models: a ‘basic’ age-size-growth model; and a ‘comprehensive’ growth model, using Heckman’s two-step regression procedure. Estimation is by log-linear regression on cross-section data, with corrections for sample selection bias and heteroskedasticity. Our results refute a pure Gibrat model (but support a more general variant) and support the learning model, as regards the consequences of size and age for growth; and our extension to a comprehensive model highlights the importance of location choice and customer orientation for the growth of Chinese private firms. In the latter model, growth is explained by variables like planning, R&D orientation, market competition, elasticity of demand etc. as well as by control variables. Our work on small firm growth achieves two things. First, it upholds the validity of ‘basic’ size-age-growth models, and successfully applies them to the Chinese economy. Second, it extends the compass of such models to a ‘comprehensive’ growth model incorporating firm-specific and environmental variables.

Growth and Survival Determinants of Chinese Private Firms: Fieldwork evidence and econometric estimates

This paper reports on one of the first empirical attempts to investigate small firm growth and survival, and their determinants, in the Peoples’ Republic of China. The work is based on field work evidence gathered from a sample of 83 Chinese private firms (mainly SMEs) collected initially by face-to-face interviews, and subsequently by follow-up telephone interviews a year later. We extend the models of Gibrat (1931) and Jovanovic (1982), which traditionally focus on size and age alone (e.g. Brock and Evans, 1986), to a ‘comprehensive’ growth model with two types of additional explanatory variables: firm-specific (e.g. business planning); and environmental (e.g. choice of location). We estimate two econometric models: a ‘basic’ age-size-growth model; and a ‘comprehensive’ growth model, using Heckman’s two-step regression procedure. Estimation is by log-linear regression on cross-section data, with corrections for sample selection bias and heteroskedasticity. Our results refute a pure Gibrat model (but support a more general variant) and support the learning model, as regards the consequences of size and age for growth; and our extension to a comprehensive model highlights the importance of location choice and customer orientation for the growth of Chinese private firms. In the latter model, growth is explained by variables like planning, R&D orientation, market competition, elasticity of demand etc. as well as by control variables. Our work on small firm growth achieves two things. First, it upholds the validity of ‘basic’ size-age-growth models, and successfully applies them to the Chinese economy. Second, it extends the compass of such models to a ‘comprehensive’ growth model incorporating firm-specific and environmental variables.

Do Financial Incentives Affect Firms' Demand For Disabled Workers?

A number of OECD countries aim to encourage work integration of disabled persons using quota policies. For instance, Austrian firms must provide at least one job to a disabled worker per 25 nondisabled workers and are subject to a tax if they do not. This "threshold design" provides causal estimates of the noncompliance tax on disabled employment if firms do not manipulate nondisabled employment; a lower and upper bound on the causal effect can be constructed if they do. Results indicate that firms with 25 nondisabled workers employ about 0.04 (or 12%) more disabled workers than without the tax; firms do manipulate employment of nondisabled workers but the lower bound on the employment effect of the quota remains positive; employment effects are stronger in low-wage firms than in high-wage firms; and firms subject to the quota of two disabled workers or more hire 0.08 more disabled workers per additional quota job. Moreover, increasing the noncompliance tax increases excess disabled employment, whereas paying a bonus to overcomplying firms slightly dampens the employment effects of the tax.

Demand for private health insurance: Is there a quality gap?

Quality of care is qualified as a main determinant of the demand forvoluntary private health insurance (PHI) in National Health Systems(NHS). This paper provides new evidence on the influence of the qualitygap between public and private health insurance and other demanddeterminants in the demand for PHI in Catalonia. The demand for PHI ismodelled as a demand for health care quality. Unlike previous studies, the database employed allows for the development of a link between thetheoretical and the empirical model dealing with unobserved heterogeneityand endogeneity issues. Results suggest that a rise in PHI qualityenhances an equivalent influence in the demand for PHI as an equalreduction of NHS quality. Income and price elasticity estimates areconsistent with the observed feature that PHI appears to be a luxurygood and individuals tend to be relatively insensible to tax relief'sand monetary co-payments in insurance contracts.

The nitrogen sufficiency index underlying estimates of nitrogen fertilization requirements of common bean

Chlorophyll determination with a portable chlorophyll meter can indicate the period of highest N demand of plants and whether sidedressing is required or not. In this sense, defining the optimal timing of N application to common bean is fundamental to increase N use efficiency, increase yields and reduce the cost of fertilization. The objectives of this study were to evaluate the efficiency of N sufficiency index (NSI) calculated based on the relative chlorophyll index (RCI) in leaves, measured with a portable chlorophyll meter, as an indicator of time of N sidedressing fertilization and to verify which NSI (90 and 95 %) value is the most appropriate to indicate the moment of N fertilization of common bean cultivar Perola. The experiment was carried out in the rainy and dry growing seasons of the agricultural year 2009/10 on a dystroferric Red Nitosol, in Botucatu, São Paulo State, Brazil. The experiment was arranged in a randomized complete block design with five treatments, consisting of N managements (M1: 200 kg ha-1 N (40 kg at sowing + 80 kg 15 days after emergence (DAE) + 80 kg 30 DAE); M2: 100 kg ha-1 N (20 kg at sowing + 40 kg 15 DAE + 40 kg 30 DAE); M3: 20 kg ha-1 N at sowing + 30 kg ha-1 when chlorophyll meter readings indicated NSI < 95 %; M4: 20 kg ha-1 N at sowing + 30 kg ha-1 N when chlorophyll meter readings indicated NSI < 90 % and, M5: control (without N application)) and four replications. The variables RCI, aboveground dry matter, total leaf N concentration, production components, grain yield, relative yield, and N use efficiency were evaluated. The RCI correlated with leaf N concentrations. By monitoring the RCI with the chlorophyll meter, the period of N sidedressing of common bean could be defined, improving N use efficiency and avoiding unnecessary N supply to common bean. The NSI 90 % of the reference area was more efficient to define the moment of N sidedressing of common bean, to increase N use efficiency.

Effects of unit - based pricing on the waste collection demand : a meta - regression analysis

We perform a meta - analysis of 21 studies that estimate the elasticity of the price of waste collection demand upon waste quantities, a prior literature review having revealed that the price elasticity differs markedly. Based on a meta - regression with a total of 65 observations, we find no indication that municipal data give higher estimates for price elasticities than those associated with household data. Furthermore, there is no evidence that treating prices as exogenous underestimates the price elasticity. We find that much of the variation can be explained by sample size, the use of a weight - based as opposed to a volume - based pricing system, and the pricing of compostable waste. We also show that price elasticities determined in the USA and point estimations of elasticities are more elastic, but these effects are not robust to the changing of model specifications. Finally, our tests show that there is no evidence of publication bias while there is some evidence of the existence of genuine empirical effect.

Logistics Network Design with Differentiated Delivery Lead-Time: Benefits and Insights

Most logistics network design models assume exogenous customer demand that is independent of the service time or level. This paper examines the benefits of segmenting demand according to lead-time sensitivity of customers. To capture lead-time sensitivity in the network design model, we use a facility grouping method to ensure that the different demand classes are satisfied on time. In addition, we perform a series of computational experiments to develop a set of managerial insights for the network design decision making process.

Demand response experience in Europe: policies, programmes and implementation

Over the last few years, load growth, increases in intermittent generation, declining technology costs and increasing recognition of the importance of customer behaviour in energy markets have brought about a change in the focus of Demand Response (DR) in Europe. The long standing programmes involving large industries, through interruptible tariffs and time of day pricing, have been increasingly complemented by programmes aimed at commercial and residential customer groups. Developments in DR vary substantially across Europe reflecting national conditions and triggered by different sets of policies, programmes and implementation schemes. This paper examines experiences within European countries as well as at European Union (EU) level, with the aim of understanding which factors have facilitated or impeded advances in DR. It describes initiatives, studies and policies of various European countries, with in-depth case studies of the UK, Italy and Spain. It is concluded that while business programmes, technical and economic potentials vary across Europe, there are common reasons as to why coordinated DR policies have been slow to emerge. This is because of the limited knowledge on DR energy saving capacities; high cost estimates for DR technologies and infrastructures; and policies focused on creating the conditions for liberalising the EU energy markets.

‘Nudging’ energy users: regulatory measures to address the risk of aggregate peak demand in European electricity markets

For decades regulators in the energy sector have focused on facilitating the maximisation of energy supply in order to meet demand through liberalisation and removal of market barriers. The debate on climate change has emphasised a new type of risk in the balance between energy demand and supply: excessively high energy demand brings about significantly negative environmental and economic impacts. This is because if a vast number of users is consuming electricity at the same time, energy suppliers have to activate dirty old power plants with higher greenhouse gas emissions and higher system costs. The creation of a Europe-wide electricity market requires a systematic investigation into the risk of aggregate peak demand. This paper draws on the e-Living Time-Use Survey database to assess the risk of aggregate peak residential electricity demand for European energy markets. Findings highlight in which countries and for what activities the risk of aggregate peak demand is greater. The discussion highlights which approaches energy regulators have started considering to convince users about the risks of consuming too much energy during peak times. These include ‘nudging’ approaches such as the roll-out of smart meters, incentives for shifting the timing of energy consumption, differentiated time-of-use tariffs, regulatory financial incentives and consumption data sharing at the community level.

Multiproduct activity in an experimental differentiated oligopoly

In a symmetric differentiated experimental oligopoly with multiproduct firms we test the predictive power of the corresponding Bertrand-Nash equilibria. Subjects are not informed on the specification of the underlying demand model. In the presence of intense multiproduct activity, and provided that a parallel pricing rule is imposed to multiproduct firms, strategies tend to confirm the non-cooperative multiproduct solution.

Applicatiion of Almost ideal demand system for a pharmaceutical

This thesis is an application of the Almost Ideal Demand System approach of Deaton and Muellbauer,1980, for a particular pharmaceutical, Citalopram, in which GORMAN´s (1971) multi-stage budgeting approach is applied basically since it is one of the most useful approach in estimating demand for differentiated products. Citalopram is an antidepressant drug that is used in the treatment of major depression. As for most other pharmaceuticals whose the patent has expired, there exist branded and generic versions of Citalopram. This paper is aimed to define its demand system with two stage models for the branded version and five generic versions, and to show whether generic versions are able to compete with the branded version. I calculated the own price elasticities, and it made me possible to compare and make a conclusion about the consumers’ choices over the brand and generic drugs. Even though the models need for being developed with some additional variables, estimation results of models and uncompensated price elasticities indicated that the branded version has still power in the market, and generics are able to compete with lower prices. One important point that has to be taken into consideration is that the Swedish pharmaceutical market faced a reform on October 1, 2002, that aims to make consumer better informed about the price and decrease the overall expenditures for pharmaceuticals. Since there were not significantly enough generic sales to take into calculation before the reform, my paper covers sales after the reform.

Modelling Recreation Demand Using Choice Experiments : Using Swedish Snowmobilers Demand for Groomed trails

This paper is concerned with the use of the choice experiment method for modeling the demand for snowmobiling . The Choice Experiment includes five attributes, standard, composition, length, price day card and experience along trail. The paper estimates the snowmobile owners’ preferences and the most preferred attributes, including their will-ingness to pay for a daytrip on groomed snowmobile trail. The data consists of the an-swers from 479 registered snowmobile owners, who answered two hypothetical choice questions each. Estimating using the multinominal logit model, it is found that snow-mobilers on average are willing to pay 22.5 SEK for one day of snowmobiling on a trail with quality described as skidded every 14th day. Furthermore, it is found that the WTP increases with the quality of trail grooming. The result of this paper can be used as a yardstick for snowmobile clubs wanting to develop their trail net worth, organizations and companies developing snowmobiling as a recreational activities and marketers in-terested in marketing snowmobiling as recreational activities.

Price elasticity of demand for cigarettes : The Case of Sweden

Due to health problems and the negative externalities associated with cigarette consumption, many governments try to discourage cigarette consumption by increasing its price through taxation. However, cigarette, like the other addictive goods, is viewed as that it is not sensitive to demand rules and the market forces. This study analyses the effect of price increase on cigarette consumption. We used Swedish time series data from 1970 to 2010. Our results reveal that though cigarette is addictive substance its demand is sensitive to changes in the price. Estimates from this study indicate short-run price-elasticity of -0.29 and the long run price elasticity of -0.47.

Three essays on local demand for public services

Local provision of public services has the positive effect of increasing the efficiency because each locality has its idiosyncrasies that determine a particular demand for public services. This dissertation addresses different aspects of the local demand for public goods and services and their relationship with political incentives. The text is divided in three essays. The first essay aims to test the existence of yardstick competition in education spending using panel data from Brazilian municipalities. The essay estimates two-regime spatial Durbin models with time and spatial fixed effects using maximum likelihood, where the regimes represent different electoral and educational accountability institutional settings. First, it is investigated whether the lame duck incumbents tend to engage in less strategic interaction as a result of the impossibility of reelection, which lowers the incentives for them to signal their type (good or bad) to the voters by mimicking their neighbors’ expenditures. Additionally, it is evaluated whether the lack of electorate support faced by the minority governments causes the incumbents to mimic the neighbors’ spending to a greater extent to increase their odds of reelection. Next, the essay estimates the effects of the institutional change introduced by the disclosure on April 2007 of the Basic Education Development Index (known as IDEB) and its goals on the strategic interaction at the municipality level. This institutional change potentially increased the incentives for incumbents to follow the national best practices in an attempt to signal their type to voters, thus reducing the importance of local information spillover. The same model is also tested using school inputs that are believed to improve students’ performance in place of education spending. The results show evidence for yardstick competition in education spending. Spatial auto-correlation is lower among the lame ducks and higher among the incumbents with minority support (a smaller vote margin). In addition, the institutional change introduced by the IDEB reduced the spatial interaction in education spending and input-setting, thus diminishing the importance of local information spillover. The second essay investigates the role played by the geographic distance between the poor and non-poor in the local demand for income redistribution. In particular, the study provides an empirical test of the geographically limited altruism model proposed in Pauly (1973), incorporating the possibility of participation costs associated with the provision of transfers (Van de Wale, 1998). First, the discussion is motivated by allowing for an “iceberg cost” of participation in the programs for the poor individuals in Pauly’s original model. Next, using data from the 2000 Brazilian Census and a panel of municipalities based on the National Household Sample Survey (PNAD) from 2001 to 2007, all the distance-related explanatory variables indicate that an increased proximity between poor and non-poor is associated with better targeting of the programs (demand for redistribution). For instance, a 1-hour increase in the time spent commuting by the poor reduces the targeting by 3.158 percentage points. This result is similar to that of Ashworth, Heyndels and Smolders (2002) but is definitely not due to the program leakages. To empirically disentangle participation costs and spatially restricted altruism effects, an additional test is conducted using unique panel data based on the 2004 and 2006 PNAD, which assess the number of benefits and the average benefit value received by beneficiaries. The estimates suggest that both cost and altruism play important roles in targeting determination in Brazil, and thus, in the determination of the demand for redistribution. Lastly, the results indicate that ‘size matters’; i.e., the budget for redistribution has a positive impact on targeting. The third essay aims to empirically test the validity of the median voter model for the Brazilian case. Information on municipalities are obtained from the Population Census and the Brazilian Supreme Electoral Court for the year 2000. First, the median voter demand for local public services is estimated. The bundles of services offered by reelection candidates are identified as the expenditures realized during incumbents’ first term in office. The assumption of perfect information of candidates concerning the median demand is relaxed and a weaker hypothesis, of rational expectation, is imposed. Thus, incumbents make mistakes about the median demand that are referred to as misperception errors. Thus, at a given point in time, incumbents can provide a bundle (given by the amount of expenditures per capita) that differs from median voter’s demand for public services by a multiplicative error term, which is included in the residuals of the demand equation. Next, it is estimated the impact of the module of this misperception error on the electoral performance of incumbents using a selection models. The result suggests that the median voter model is valid for the case of Brazilian municipalities.