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Output Price Risk, Material Input Price Risk, and Price Margins: Evidence from the US Catfish Industry.

Directory of Open Access Journals (Sweden)

David Bouras

2017-07-01

Full Text Available Aim/purpose - To develop a conceptual model for analyzing the impact of output price risk and material input price risk on price margins. Design/methodology/approach - To analyze the combined effect of output price risk and material input risk on price margins, we use a series of comparative static analyses, GARCH models, and data ranging from 1990/01 to 2012/12. Findings - The theoretical results indicate that the impact of output price risk and the impact of material input price risk on price margins are ambiguous and, to a great extent, hinge on the correlation between output price and material input price. The empirical results show that whole frozen catfish price risk and live catfish price risk negatively affect the price margin for frozen catfish. The empirical results, however, indicate that the risk of the price of live catfish affects markedly the price margin for frozen whole catfish in contrast to the impact of the risk of the price of frozen whole catfish. Research implications/limitations - The empirical results have significant implications for managerial decision-making especially when crafting strategies for improving price margins. Accordingly, in order to beef up the price margin for frozen whole catfish, catfish processors may consider engaging in vertical integration. This paper has some limitations: first, it assumes that firms operate in competitive markets; second, it assumes that firms produce and sell a single product. Originality/value/contribution - Unlike earlier studies that focused solely on the effect of output price risk on price margins, this paper analyzes theoretically and empirically the impact of output price risk and material input price risk on price margins.
Energy prices, equalization and federalism

International Nuclear Information System (INIS)

Courchene, T.J.

2005-01-01

A rise in oil prices over the last 30 years has shaped the debate on the equalization formula as well as the nature of fiscal federalism. The oil shocks of 1973 and 1979 contributed to the creation of the National Energy Program (NEP) in 1980 and the Energy Pricing and Taxation Agreement (EPTA) between Ottawa and Alberta in 1981. The current surge in oil prices, to recent highs of $70 a barrel has resulted in a new debate on energy pricing, equalization and fiscal frameworks. This article presented a review of the history of oil and federalism, and proposed a remedy to the horizontal fiscal imbalance by allocating the fixed equalization pool in accordance with fiscal capacity disparities relating to non-resource revenues. An interprovincial revenue-sharing pool was suggested for resource revenues, agreed to and operated by the provinces. It was suggested that after the price spike in 1973 in which the price of oil tripled, a key part of the rationale for imposing export taxes on oil equal to the difference between domestic and world prices was that the federal government could subsidize oil imports into eastern Canada and maintain a uniform domestic price across the country. By continuing to subsidize imports and maintaining a domestic price below the world price, the government has been diverting potential energy revenues from energy-rich provinces and transferring them directly to Canadians in terms of subsidized energy prices. It was noted that energy price surges cannot send equalization payments soaring as they did before because of the 2004 Framework Agreement, in which the overall equalization will be increased to $10.9 billion. A 2-tier approach to equalization was presented, in which it was suggested that the $10.9 billion pool should be allocated with fiscal capacity disparities relating to non-resource revenues. The creation of a revenue sharing pool for resource revenues was recommended. It was suggested that the 2 approaches will result in a strategic
Energy prices, equalization and federalism

Energy Technology Data Exchange (ETDEWEB)

Courchene, T.J. [Queen' s Univ., Kingston, ON (Canada). School of Policy Studies

2005-10-01

A rise in oil prices over the last 30 years has shaped the debate on the equalization formula as well as the nature of fiscal federalism. The oil shocks of 1973 and 1979 contributed to the creation of the National Energy Program (NEP) in 1980 and the Energy Pricing and Taxation Agreement (EPTA) between Ottawa and Alberta in 1981. The current surge in oil prices, to recent highs of $70 a barrel has resulted in a new debate on energy pricing, equalization and fiscal frameworks. This article presented a review of the history of oil and federalism, and proposed a remedy to the horizontal fiscal imbalance by allocating the fixed equalization pool in accordance with fiscal capacity disparities relating to non-resource revenues. An interprovincial revenue-sharing pool was suggested for resource revenues, agreed to and operated by the provinces. It was suggested that after the price spike in 1973 in which the price of oil tripled, a key part of the rationale for imposing export taxes on oil equal to the difference between domestic and world prices was that the federal government could subsidize oil imports into eastern Canada and maintain a uniform domestic price across the country. By continuing to subsidize imports and maintaining a domestic price below the world price, the government has been diverting potential energy revenues from energy-rich provinces and transferring them directly to Canadians in terms of subsidized energy prices. It was noted that energy price surges cannot send equalization payments soaring as they did before because of the 2004 Framework Agreement, in which the overall equalization will be increased to $10.9 billion. A 2-tier approach to equalization was presented, in which it was suggested that the $10.9 billion pool should be allocated with fiscal capacity disparities relating to non-resource revenues. The creation of a revenue sharing pool for resource revenues was recommended. It was suggested that the 2 approaches will result in a strategic
Pricing hospital care: Global budgets and marginal pricing strategies.

Science.gov (United States)

Sutherland, Jason M

2015-08-01

The Canadian province of British Columbia (BC) is adding financial incentives to increase the volume of surgeries provided by hospitals using a marginal pricing approach. The objective of this study is to calculate marginal costs of surgeries based on assumptions regarding hospitals' availability of labor and equipment. This study is based on observational clinical, administrative and financial data generated by hospitals. Hospital inpatient and outpatient discharge summaries from the province are linked with detailed activity-based costing information, stratified by assigned case mix categorizations. To reflect a range of operating constraints governing hospitals' ability to increase their volume of surgeries, a number of scenarios are proposed. Under these scenarios, estimated marginal costs are calculated and compared to prices being offered as incentives to hospitals. Existing data can be used to support alternative strategies for pricing hospital care. Prices for inpatient surgeries do not generate positive margins under a range of operating scenarios. Hip and knee surgeries generate surpluses for hospitals even under the most costly labor conditions and are expected to generate additional volume. In health systems that wish to fine-tune financial incentives, setting prices that create incentives for additional volume should reflect knowledge of hospitals' underlying cost structures. Possible implications of mis-pricing include no response to the incentives or uneven increases in supply. Copyright © 2015 The Authors. Published by Elsevier Ireland Ltd.. All rights reserved.
Marginal-cost pricing for Hydro-Quebec residential customers

International Nuclear Information System (INIS)

Paquin, C.

1994-02-01

An option available to governments and to utilities such as Hydro-Quebec for responding to objectives of energy efficiency is the adoption of marginal cost pricing. Compared to currently used price structures, marginal cost pricing will allow improvement of price signals and assure an optimal utilization of the resource. That type of pricing could be economically beneficial but may not be desirable from the point of view of revenue distribution. Taking account of Hydro-Quebec's cost structure, pure marginal cost pricing would generate an income that would be strongly contested on equity grounds. For example, it would raise prices 60% for residential customers. Faced with this possibility, an analysis is presented of the impact of a peak-offpeak pricing (or pure marginal cost pricing) on Hydro-Quebec's residential customer energy bills. The marginal costs of Hydro-Quebec are calculated by the method of Bernard and Chatel (1985) and analysis of the results is based on Friedman and Weare (1993). A sample of 28,417 residential customers from a 1989 Hydro-Quebec survey is used in the study. Two scenarios are analyzed; the first allowing comparison of the energy bill only on the basis of marginal costs and of average costs, and the second allowing comparison of the impact of marginal cost pricing on the total bill. In the first scenario, the impact translates into a 31% increase in energy bills for the entire customer class considered; in addition, this impact is inversely proportional to the revenue class. In the second scenario, the increase is 24%. 33 refs., 10 figs., 53 tabs
Marginal Pricing and Student Investment in Higher Education

Science.gov (United States)

Hemelt, Steven W.; Stange, Kevin M.

2016-01-01

This paper examines the effect of marginal price on students' educational investments using rich administrative data on students at Michigan public universities. Marginal price refers to the amount colleges charge for each additional credit taken in a semester. Institutions differ in how they price credits above the full-time minimum (of 12…
Energy prices, equalization and Canadian federalism : comparing Canada's energy price shocks

International Nuclear Information System (INIS)

Courchene, T.J.

2006-01-01

Revenues from natural resources during periods of high energy prices can create problems with the way the Canadian federal government distributes wealth through equalization. This paper traced the history of equalization in comparison with energy prices from the years 1973 to 2003. It was noted that the National Energy Program, section 92A of the Constitution, and the 5-province standard were all federal responses to initial energy price increases. It was suggested that current increases in energy prices demand a different response. The author examined a method of using the national average standard to calculate equalization payments as a means of eliminating the inequities created by the current 5-province standard, which excludes both Alberta and the Atlantic provinces. It was argued that the exclusion of Alberta's energy resources creates a false impression that other provinces such as British Columbia and Saskatchewan are rich in resources. It was suggested that fiscal imbalance between provinces is a significant challenge to the current Canadian government. New approaches to cash transfers to the provinces were discussed. A 2-tier equalization scheme was proposed that separated natural resource revenues from other revenues. It was concluded that the government's previous response to high energy prices will not be appropriate for addressing the current price shock. A 2-tier equalization scheme will mean that resource-rich provinces have an opportunity to participate more fully in federal decision-making. 53 refs., 3 figs
New evidence on the asymmetry in gasoline price: volatility versus margin?

International Nuclear Information System (INIS)

Abosedra, S.; Radchenko, S.

2006-01-01

This paper examines recent evidence on the role that gasoline margins and volatility play in the asymmetric response of gasoline prices to changes in oil prices at different stages of distribution process. In a regression model with margins, we find that margins are statistically significant in explaining asymmetry between crude oil and spot gasoline prices, spot gasoline prices and wholesale gasoline prices, and wholesale gasoline prices and retail prices. In a regression model with input volatility, we find evidence that volatility is responsible for asymmetry between wholesale gasoline prices and retail gasoline prices. When both, gasoline margins and gasoline volatility are included in the regression, we find evidence supporting margins, the search theory, volatility, the oligopolistic coordination theory and an explanation of asymmetry. (author)
Direm prices, prices and margins of petroleum products in France and in the European Union

International Nuclear Information System (INIS)

2005-01-01

This document presents in a series of graphics and tables, the evolution of petroleum products prices and margins in France and in the European Union: crude oil prices, Rotterdam's petroleum products quotation, raw brent refining margin, automotive and domestic fuel prices. (J.S.)
Pushing Economies (and Students) outside the Factor Price Equalization Zone

Science.gov (United States)

Oslington, Paul; Towers, Isaac

2009-01-01

Despite overwhelming empirical evidence of the failure of factor price equalization, most teaching of international trade theory (even at the graduate level) assumes that economies are incompletely specialized and that factor price equalization holds. The behavior of trading economies in the absence of factor price equalization is not well…
A comparison of pay-as-bid and marginal pricing in electricity markets

Science.gov (United States)

Ren, Yongjun

This thesis investigates the behaviour of electricity markets under marginal and pay-as-bid pricing. Marginal pricing is believed to yield the maximum social welfare and is currently implemented by most electricity markets. However, in view of recent electricity market failures, pay-as-bid has been extensively discussed as a possible alternative to marginal pricing. In this research, marginal and pay-as-bid pricing have been analyzed in electricity markets with both perfect and imperfect competition. The perfect competition case is studied under both exact and uncertain system marginal cost prediction. The comparison of the two pricing methods is conducted through two steps: (i) identify the best offer strategy of the generating companies (gencos); (ii) analyze the market performance under these optimum genco strategies. The analysis results together with numerical simulations show that pay-as-bid and marginal pricing are equivalent in a perfect market with exact system marginal cost prediction. In perfect markets with uncertain demand prediction, the two pricing methods are also equivalent but in an expected value sense. If we compare from the perspective of second order statistics, all market performance measures exhibit much lower values under pay-as-bid than under marginal pricing. The risk of deviating from the mean is therefore much higher under marginal pricing than under pay-as-bid. In an imperfect competition market with exact demand prediction, the research shows that pay-as-bid pricing yields lower consumer payments and lower genco profits. This research provides quantitative evidence that challenges some common claims about pay-as-bid pricing. One is that under pay-as-bid, participants would soon learn how to offer so as to obtain the same or higher profits than what they would have obtained under marginal pricing. This research however shows that, under pay-as-bid, participants can at best earn the same profit or expected profit as under marginal
Refining prices and margins in 1998

International Nuclear Information System (INIS)

Favennec, J.P.; Baudoin, C.

1999-01-01

Despite a business environment that was globally mediocre due primarily to the Asian crisis and to a mild winter in the northern hemisphere, the signs of improvement noted in the refining activity in 1996 were borne out in 1997. But the situation is not yet satisfactory in this sector: the low return on invested capital and the financing of environmental protection expenditure are giving cause for concern. In 1998, the drop in crude oil prices and the concomitant fall in petroleum product prices was ultimately rather favorable to margins. Two elements tended to put a damper on this relative optimism. First of all, margins continue to be extremely volatile and, secondly, the worsening of the economic and financial crisis observed during the summer made for a sharp decline in margins in all geographic regions, especially Asia
DIREM's prices. Prices and margins of petroleum products in France and in the European Union

International Nuclear Information System (INIS)

2002-08-01

This report presents in a series of graphs and tables the prices and margins of petroleum products in France and in the European Union (EU) according to the data compiled by the Direction of energy and mineral resources (DIREM) of the French general direction of energy and raw materials (DGEMP, Ministry of economy, finances and industry): evolution of crude prices, evolution of Rotterdam's quotation of petroleum products, raw margin of brent refining, French fuel prices (automotive and domestic fuels, evolution, comparison with EU and Rotterdam's prices), comparison with prices in other European countries, evolution of average retail prices in France. (J.S.)
Energy prices, equalization and Canadian federalism : comparing Canada's energy price shocks

Energy Technology Data Exchange (ETDEWEB)

Courchene, T.J. [Queen' s Univ., Kingston, ON (Canada). School of Policy Studies; Institute for Research on Public Policy, Montreal, PQ (Canada)

2006-04-01

Revenues from natural resources during periods of high energy prices can create problems with the way the Canadian federal government distributes wealth through equalization. This paper traced the history of equalization in comparison with energy prices from the years 1973 to 2003. It was noted that the National Energy Program, section 92A of the Constitution, and the 5-province standard were all federal responses to initial energy price increases. It was suggested that current increases in energy prices demand a different response. The author examined a method of using the national average standard to calculate equalization payments as a means of eliminating the inequities created by the current 5-province standard, which excludes both Alberta and the Atlantic provinces. It was argued that the exclusion of Alberta's energy resources creates a false impression that other provinces such as British Columbia and Saskatchewan are rich in resources. It was suggested that fiscal imbalance between provinces is a significant challenge to the current Canadian government. New approaches to cash transfers to the provinces were discussed. A 2-tier equalization scheme was proposed that separated natural resource revenues from other revenues. It was concluded that the government's previous response to high energy prices will not be appropriate for addressing the current price shock. A 2-tier equalization scheme will mean that resource-rich provinces have an opportunity to participate more fully in federal decision-making. 53 refs., 3 figs.
Marginal pricing of transmission services: An analysis of cost recovery

Energy Technology Data Exchange (ETDEWEB)

Perez-Arriaga, I.J.; Rubio, F.J. [Univ. Pontificia Comillas, Madrid (Spain); Puerta, J.F.; Arceluz, J.; Marin, J. [IBERDROLA, Bilbao (Spain). Unidad de Planificacion Estrategica

1995-02-01

This paper presents an in-depth analysis of network revenues computed with marginal pricing, and in particular it investigates the reasons why marginal prices fail to recover the total incurred network costs in actual power systems. The basic theoretical results are presented and the major causes of the mismatch between network costs and marginal revenues are identified and illustrated with numerical examples, some tutorial and others of realistic size. The regulatory implications of marginal network pricing in the context of competitive electricity markets are analyzed, and suggestions are provided for the meaningful allocation of the costs of the network among its users.
Marginal pricing of transmission services: An analysis of cost recovery

International Nuclear Information System (INIS)

Perez-Arriaga, I.J.; Rubio, F.J.; Puerta, J.F.; Arceluz, J.; Marin, J.

1995-01-01

This paper presents an in-depth analysis of network revenues computed with marginal pricing, and in particular it investigates the reasons why marginal prices fail to recover the total incurred network costs in actual power systems. The basic theoretical results are presented and the major causes of the mismatch between network costs and marginal revenues are identified and illustrated with numerical examples, some tutorial and others of realistic size. The regulatory implications of marginal network pricing in the context of competitive electricity markets are analyzed, and suggestions are provided for the meaningful allocation of the costs of the network among its users
Marginal pricing of transmission services. An analysis of cost recovery

Energy Technology Data Exchange (ETDEWEB)

Perez-Arriaga, I.J.., Rubio, F.J. [Instituto de Investigacion Technologica, Universidad Pontificia Comillas, Madrid (Spain); Puerta, J.F.; Arceluz, J.; Marin, J. [Unidad de Planificacion Estrategica, Iberdrola, Madrid (Spain)

1996-12-31

The authors present an in-depth analysis of network revenues that are computed with marginal pricing, and investigate the reasons why marginal prices in actual power systems fail to recover total incurred network costs. The major causes of the failure are identified and illustrated with numerical examples. The paper analyzes the regulatory implications of marginal network pricing in the context of competitive electricity markets and provides suggestions for the meaningful allocation of network costs among users. 5 figs., 9 tabs., 8 refs.
Marginal pricing of transmission services. An analysis of cost recovery

International Nuclear Information System (INIS)

Perez-Arriaga, I.J.., Rubio, F.J.; Puerta, J.F.; Arceluz, J.; Marin, J.

1996-01-01

The authors present an in-depth analysis of network revenues that are computed with marginal pricing, and investigate the reasons why marginal prices in actual power systems fail to recover total incurred network costs. The major causes of the failure are identified and illustrated with numerical examples. The paper analyzes the regulatory implications of marginal network pricing in the context of competitive electricity markets and provides suggestions for the meaningful allocation of network costs among users. 5 figs., 9 tabs., 8 refs
The Implementation of Marginal External Cost Pricing in Road Transport

OpenAIRE

Verhoef, Erik T.

1998-01-01

This paper discusses a number of issues that will become increasingly important nowthat the concept of marginal external cost pricing becomes more likely to be implementedas a policy strategy in transport in reality. The first part of the paper deals with thelong-run efficiency of marginal external cost pricing. It is shown that such prices notonly optimize short-run mobility, given the shape and position of the relevant demandand cost curves, but even more importantly, also optimally affect ...
Electricity to natural gas competition under customer-side technological change: a marginal cost pricing analysis

International Nuclear Information System (INIS)

Gulli', Francesco

2004-01-01

This paper aims at evaluating the impact of technological change (on the customer side of the meter) on the network energy industry (electricity and natural gas). The performances of the small gas fired power technologies and the electrical reversible heat pumps have improved remarkably over the last ten years, making possible (or more viable) two opposite technological trajectories: the fully gas-based system, based on the use of small CHP (combined heat and power generation) plants, which would involve a wide decentralisation of energy supply; the fully electric-based system, based on the use of reversible electric heat pumps, which would imply increasing centralisation of energy supply. The analysis described in this paper attempts to evaluate how these two kinds of technological solutions can impact on inter-service competition when input prices are ste equals to marginal costs of supply in each stage of the electricity and natural gas industries. For this purpose, unbundled prices over time and over space are simulated. In particular the paper shows that unbundling prices over space in not very important in affecting electricity to natural gas competition and that, when prices are set equal to long-run marginal costs, the fully electric-based solution (the reversible heat pump) is by far preferable to the fully gas-based solution (the CHP gas fired small power plant). In consequence, the first best outcome of the technological change would involve increasing large power generation and imported (from the utility grid) electricity consumption. Given this framework, we have to ask ourselves why operators, regulators and legislators are so optimistic about the development of the fully gas-based solutions. In this respect, the paper suggests that market distortions (such as market power, energy taxation and inefficient pricing regulation) might have give an ambiguous representation of the optimal technological trajectory, inducing to overestimate the social value

Money flexibility, price elasticity, and elasticity of marginal utility of consumption

OpenAIRE

Malakhov, Sergey

2014-01-01

The development of G.Stigler’s original model of search describes the mathematical relationship between the elasticity of the marginal utility of consumption, the price elasticity, and the elasticity of the marginal utility of money income with respect to increase in the price of living and/or to inflation. This relationship can be used not only in economics of well-being but also in microeconomics where the increase in the price of living, i.e., in purchase price, can make consumption “bad” ...
Deregulated model and locational marginal pricing

International Nuclear Information System (INIS)

Sood, Yog Raj; Padhy, N.P.; Gupta, H.O.

2007-01-01

This paper presents a generalized optimal model that dispatches the pool in combination with privately negotiated bilateral and multilateral contracts while maximizing social benefit has been proposed. This model determines the locational marginal pricing (LMP) based on marginal cost theory. It also determines the size of non-firm transactions as well as pool demand and generations. Both firms as well as non-firm transactions are considered in this model. The proposed model has been applied to IEEE-30 bus test system. In this test system different types of transactions are added for analysis of the proposed model. (author)
Locational marginal prices with SVC in Indian electricity market ...

African Journals Online (AJOL)

Spot pricing based on short run marginal cost (SRMC) theory has the potential to provide the economic signals for the power system operation. Reactive power has gained importance as an ancillary service in competitive markets and its impact on nodal price can not be ignored. With the emergence of FACTS technology, ...
THE EFFECTS OF CHANGING MARGIN LEVELS ON FUTURES OPTIONS PRICE

Institute of Scientific and Technical Information of China (English)

Yanling GU; Juan LI

2006-01-01

The paper studies the effects of changing margin levels on the price of futures options and how to organize a market maker's position. Black model (1976) becomes a special case of this paper.The paper prices futures options by duplicating them and adopting the theory of Backward Stochastic Differential Equations (BSDEs for short). Furthermore, the price of a futures option is the unique solution to a nonlinear BSDE.
Dynamics of Price-Cost Margins in the U.S. Meat Industry

OpenAIRE

Chidmi, Benaissa; Fadiga, Mohamadou L.

2007-01-01

This study analyses the stochastic behavior of price-cost margins (PCMs) in the U.S. meat industry. It, first, develops and estimates a vertical relationship economic model to derive PCMs in the U.S. meat industry (Beef, Pork, and Poultry). Second it analyzes the behavior of PCMs by decomposing them into their seasonal, cyclical, and trend components using the state-space and the Kalman filtering methods. Price-cost margins in the U.S. meat industry are governed by two common trends and two c...
An equivalent marginal cost-pricing model for the district heating market

International Nuclear Information System (INIS)

Zhang, Junli; Ge, Bin; Xu, Hongsheng

2013-01-01

District heating pricing is a core element in reforming the heating market. Existing district heating pricing methods, such as the cost-plus pricing method and the conventional marginal-cost pricing method, cannot simultaneously provide both high efficiency and sufficient investment cost return. To solve this problem, the paper presents a new pricing model, namely Equivalent Marginal Cost Pricing (EMCP) model, which is based on the EVE pricing theory and the unique characteristics of heat products and district heating. The EMCP model uses exergy as the measurement of heating product value and places products from different district heating regions into the same competition platform. In the proposed model, the return on investment cost is closely related to the quoted cost, and within the limitations of the Heating Capacity Cost Reference and the maximum compensated shadow capacity cost, both lower and higher price speculations of heat producers are restricted. Simulation results show that the model can guide heat producers to bid according to their production costs and to provide reasonable returns on investment, which contributes to stimulate the role of price leverage and to promote the optimal allocation of heat resources. - Highlights: • Presents a new district heating pricing model. • Provides both high market efficiency and sufficient investment cost return. • Provides a competition mechanism for various products from different DH regions. • Both of lower and higher price speculations are restricted in the new model
Distribution Locational Marginal Pricing for Optimal Electric Vehicle Charging Management

DEFF Research Database (Denmark)

Li, Ruoyang; Wu, Qiuwei; Oren, Shmuel S.

2013-01-01

This paper presents an integrated distribution locational marginal pricing (DLMP) method designed to alleviate congestion induced by electric vehicle (EV) loads in future power systems. In the proposed approach, the distribution system operator (DSO) determines distribution locational marginal...... shown that the socially optimal charging schedule can be implemented through a decentralized mechanism where loads respond autonomously to the posted DLMPs by maximizing their individual net surplus...
Electricity prices in a competitive environment: Marginal cost pricing of generation services and financial status of electric utilities. A preliminary analysis through 2015

International Nuclear Information System (INIS)

1997-08-01

The emergence of competitive markets for electricity generation services is changing the way that electricity is and will be priced in the United States. This report presents the results of an analysis that focuses on two questions: (1) How are prices for competitive generation services likely to differ from regulated prices if competitive prices are based on marginal costs rather than regulated open-quotes cost-of-serviceclose quotes pricing? (2) What impacts will the competitive pricing of generation services (based on marginal costs) have on electricity consumption patterns, production costs, and the financial integrity patterns, production costs, and the financial integrity of electricity suppliers? This study is not intended to be a cost-benefit analysis of wholesale or retail competition, nor does this report include an analysis of the macroeconomic impacts of competitive electricity prices
Export Margins, Price and Quantity of Belarus’s Export Growth

Directory of Open Access Journals (Sweden)

Otamurodov Shavkat

2017-03-01

Full Text Available This paper examines the sources of Belarus’s export growth and decomposes export growth into extensive and intensive margins. This study also aims to determine export margins for intermediate and final goods and to determine the price and quantity components of the intensive export margin. In order to achieve the desired objectives, we use two methods for decomposing export growth, the count method and the export shares method. We analyse Belarus's export growth using export data at the HS-6 digit level for the 2004-2014 period. Our results show that Belarus's exports grew mainly due to growth in the price margin during the studied period 2004-2014. However, the extensive margin was important in export growth to some extent. Comparing the growth rate across final and intermediate goods reveals that although the share of final products in Belarus’s exports is not very big (18.9% in 2014, the average annual growth in exports of final products is higher than that of intermediate goods. Our investigation also shows that Belarus produces a wide range of commodities, but the share of the most of these commodities is not large; its exports depend on a restricted range of commodities. Moreover, most of the commodities are exported to Russia and Ukraine. Our results give us reason to assume that finding new markets for their new products is one of the main challenges for developing countries wishing to increase their exports by an extensive margin. This has important implications for how policy makers promote the trade and diversification of exports.
Pricing district heating by marginal cost

International Nuclear Information System (INIS)

Difs, Kristina; Trygg, Louise

2009-01-01

A vital measure for industries when redirecting the energy systems towards sustainability is conversion from electricity to district heating (DH). This conversion can be achieved for example, by replacing electrical heating with DH and compression cooling with heat-driven absorption cooling. Conversion to DH must, however, always be an economically attractive choice for an industry. In this paper the effects for industries and the local DH supplier are analysed when pricing DH by marginal cost in combination with industrial energy efficiency measures. Energy audits have shown that the analysed industries can reduce their annual electricity use by 30% and increase the use of DH by 56%. When marginal costs are applied as DH tariffs and the industrial energy efficiency measures are implemented, the industrial energy costs can be reduced by 17%. When implementing the industrial energy efficiency measures and also considering a utility investment in the local energy system, the local DH supplier has a potential to reduce the total energy system cost by 1.6 million EUR. Global carbon dioxide emissions can be reduced by 25,000 tonnes if the industrial energy efficiency measures are implemented and when coal-condensing power is assumed to be the marginal electricity source
Electricity prices in a competitive environment: Marginal cost pricing of generation services and financial status of electric utilities. A preliminary analysis through 2015

Energy Technology Data Exchange (ETDEWEB)

NONE

1997-08-01

The emergence of competitive markets for electricity generation services is changing the way that electricity is and will be priced in the United States. This report presents the results of an analysis that focuses on two questions: (1) How are prices for competitive generation services likely to differ from regulated prices if competitive prices are based on marginal costs rather than regulated {open_quotes}cost-of-service{close_quotes} pricing? (2) What impacts will the competitive pricing of generation services (based on marginal costs) have on electricity consumption patterns, production costs, and the financial integrity patterns, production costs, and the financial integrity of electricity suppliers? This study is not intended to be a cost-benefit analysis of wholesale or retail competition, nor does this report include an analysis of the macroeconomic impacts of competitive electricity prices.
Marginal cost pricing of electricity

International Nuclear Information System (INIS)

Edsbaecker, G.

1980-01-01

The discipline is economics and the phenomenon is the power system. The purpose of this system is to produce, transmit and consume electricity in such a way that the sum of consumers and suppliers surplus in maximized. This is accomplished by the means of marginal cost pricing. The concepts of the power system and the relations prevailing between and among them are picked out, defined and analyzed in the frames of economic theory and operations research. Methods are developed aiming at efficient prices so that the short run function of the power system is managed in such a way that the sum of conumers and suppliers surplus is maximized within the framwork of this system, i.e. value of service of the power system is maximized. The task of developing such methods is accomplished subject to mixed production resources, transmission losses, periodic demand and also when there is lack of information concerning future and cost conditions. The main results are methods which take to account the conditions stated above. Methods not only allowing for traditional cost minimizing but also for maximation of value of service including a process of reaching optimum by gradual adaption when demand and cost curves are not known in advance. (author)
Marginal Cost Pricing in a World without Perfect Competition: Implications for Electricity Markets with High Shares of Low Marginal Cost Resources

Energy Technology Data Exchange (ETDEWEB)

Frew, Bethany A. [National Renewable Energy Lab. (NREL), Golden, CO (United States); Clark, Kara [National Renewable Energy Lab. (NREL), Golden, CO (United States); Bloom, Aaron P. [National Renewable Energy Lab. (NREL), Golden, CO (United States); Milligan, Michael [National Renewable Energy Lab. (NREL), Golden, CO (United States)

2017-12-02

A common approach to regulating electricity is through auction-based competitive wholesale markets. The goal of this approach is to provide a reliable supply of power at the lowest reasonable cost to the consumer. This necessitates market structures and operating rules that ensure revenue sufficiency for all generators needed for resource adequacy purposes. Wholesale electricity markets employ marginal-cost pricing to provide cost-effective dispatch such that resources are compensated for their operational costs. However, marginal-cost pricing alone cannot guarantee cost recovery outside of perfect competition, and electricity markets have at least six attributes that preclude them from functioning as perfectly competitive markets. These attributes include market power, externalities, public good attributes, lack of storage, wholesale price caps, and ineffective demand curve. Until (and unless) these failures are ameliorated, some form of corrective action(s) will be necessary to improve market efficiency so that prices can correctly reflect the needed level of system reliability. Many of these options necessarily involve some form of administrative or out-of-market actions, such as scarcity pricing, capacity payments, bilateral or other out-of-market contracts, or some hybrid combination. A key focus with these options is to create a connection between the electricity market and long-term reliability/loss-of-load expectation targets, which are inherently disconnected in the native markets because of the aforementioned market failures. The addition of variable generation resources can exacerbate revenue sufficiency and resource adequacy concerns caused by these underlying market failures. Because variable generation resources have near-zero marginal costs, they effectively suppress energy prices and reduce the capacity factors of conventional generators through the merit-order effect in the simplest case of a convex market; non-convexities can also suppress prices.
A uniform price auction with locational price adjustments for competitive electricity markets

International Nuclear Information System (INIS)

Ethier, R.; Mount, T.; Schulze, W.; Zimmerman, R.; Thomas, R.

1999-01-01

Competitive electricity markets which rely on centralized dispatch require a mechanism to solicit offers from competing generators. Ideally, such an auction mechanism, provides incentives to submit offers equal to the marginal cost of generation for each generator. Economic theory suggests that the Uniform Price auction is an appropriate institution. However, an efficient implementation of this auction in an electricity context requires that the offers used in the auction reflect the appropriate locational price adjustments for transmission losses and congestion. This paper describes a uniform price auction that incorporates locational price adjustments on a Web-based platform suitable for experimentation. Preliminary results show dramatically different price and revenue results when compared with a simple continuous Discriminative auction. (author)
The importance of time cost in pricing outpatient care.

Science.gov (United States)

Heshmat, S

1988-01-01

The purpose of this article is to discuss the component of the full price charged to patients using outpatient care. The full price of a visit to a physician is equal to out-of-pocket payment (money price), and time costs. In particular, the article discusses the concept of time price (marginal value of time for a patient), and presents a specific example to illustrate the concept of time price elasticity. The concepts and information presented in this article can help marketing managers in setting pricing strategy that would explicitly consider time price.
The Provision of Services, Interest Margins and Loan Pricing in European Banking

OpenAIRE

Lepetit , Laetitia; Nys , Emmanuelle; Rous , Philippe; Tarazi , Amine

2006-01-01

This paper assesses the implications on bank interest margins of the expansion into non- traditional fee-based activities in European banking. We use a sample of 602 European commercial and cooperative banks from 1996 to 2002 and consider the total income shares of trading income and commission and fee income as measures of product diversification to explore loan pricing. Our results show that a higher income share from commission and fee activities is associated with lower margins and lower ...
Is response to price equal for those with higher alcohol consumption?

Science.gov (United States)

Byrnes, Joshua; Shakeshaft, Anthony; Petrie, Dennis; Doran, Christopher M

2016-01-01

To determine if taxation policies that increase the price of alcohol differentially reduce alcohol consumption for heavy drinkers in Australia. A two-part demand model for alcohol consumption is used to determine the price elasticity of alcohol. Quantile regression is used to determine the price elasticity estimates for various levels of consumption. The study uses Australian data collected by the National Drug Strategy Household Survey for the years 2001, 2004 and 2007. Measures of individual annual alcohol consumption were derived from three waves of the National Drug Strategy Household Survey; alcohol prices were taken from market research reports. For the overall population of drinkers, a 1% increase in the price of alcohol was associated with a 0.96% (95% CI -0.35%, -1.57%) reduction in alcohol consumption. For those in the highest 10% of drinkers by average amount consumed, a 1% increase in the price of alcohol was associated with a 1.26% (95% CI 0.82%, 1.70%) reduction in consumption. Within Australia, policies that increase the price of alcohol are about equally effective in relative terms for reducing alcohol consumption both for the general population and among those who drink heavily.
Incentive pricing and cost recovery at the basin scale.

Science.gov (United States)

Ward, Frank A; Pulido-Velazquez, Manuel

2009-01-01

Incentive pricing programs have potential to promote economically efficient water use patterns and provide a revenue source to compensate for environmental damages. However, incentive pricing may impose disproportionate costs and aggravate poverty where high prices are levied for basic human needs. This paper presents an analysis of a two-tiered water pricing system that sets a low price for subsistence needs, while charging a price equal to marginal cost, including environmental cost, for discretionary uses. This pricing arrangement can promote efficient and sustainable water use patterns, goals set by the European Water Framework Directive, while meeting subsistence needs of poor households. Using data from the Rio Grande Basin of North America, a dynamic nonlinear program, maximizes the basin's total net economic and environmental benefits subject to several hydrological and institutional constraints. Supply costs, environmental costs, and resource costs are integrated in a model of a river basin's hydrology, economics, and institutions. Three programs are compared: (1) Law of the River, in which water allocations and prices are determined by rules governing water transfers; (2) marginal cost pricing, in which households pay the full marginal cost of supplying treated water; (3) two-tiered pricing, in which households' subsistence water needs are priced cheaply, while discretionary uses are priced at efficient levels. Compared to the Law of the River and marginal cost pricing, two-tiered pricing performs well for efficiency and adequately for sustainability and equity. Findings provide a general framework for formulating water pricing programs that promote economically and environmentally efficient water use programs while also addressing other policy goals.
Machined part sales price build-up based on the contribution margin concept

OpenAIRE

Lucato, Wagner Cesar; Baptista, Elesandro Antonio; Coppini, Nivaldo Lemos

2009-01-01

One of the main competitive moves observed in the last two decades was the change in product pricing, evolving from a cost plus margin paradigm to a market-driven one. In the present days, the customer defines how much he or she is willing to pay for a given product or service. As a result, traditional cost accounting procedures and their related pricing formulas cannot accommodate that kind of change without significant turnaround in practices and concepts. Taking that into consideration, th...
Equal exchange: Determining a fair price for carbon

Energy Technology Data Exchange (ETDEWEB)

Hodes, G.; Kamel, S.

2007-12-14

This first volume in the new series CD4CDM Perspective Series focuses on determining an equal exchange between carbon buyers and sellers in CDM transactions. Contributors to this volume represent a wide spectrum of the various market actors that are interacting in order to realize both successful and equitable carbon transactions. The following issues are discussed: Global carbon price dynamics; CDM project risk profiles and/or premiums; Importance of time factors and delivery guarantees; Impact of regulatory drivers and post-Kyoto outlook; Region-specific outlooks; Strategies, contracting models and approaches. (BA)

The importance of marginal cost electricity pricing to the success of greenhouse gas reduction programs

International Nuclear Information System (INIS)

Friedman, Lee S.

2011-01-01

The efficient reduction of GHG emissions requires appropriate retail pricing of off-peak electricity. However, off-peak electricity for residential consumers is priced at 331% above its marginal cost in the United States as a whole (June 2009). Even for the 1% of residences that are on some form of time-of-use (TOU) rate schedule, the off-peak rate is almost three times higher than the marginal cost. A barrier to marginal-cost based TOU rates is that less than 9% of U.S. households have the 'smart' meters in place that can measure and record the time of consumption. Policies should be put in place to achieve full deployment. Another important barrier is consumer concern about TOU rate design. Two TOU rate designs (baseline and two-part tariff) are described that utilize marginal-cost based rates, ensure appropriate cost recovery, and minimize bill changes from current rate structures. A final barrier is to get residences on to these rates. Should a marginal-cost based TOU rate design remain an alternative for which residences could 'opt-in,' or become the default choice, or become mandatory? Time-invariant rates are a historical anachronism that subsidize very costly peak-period consumption and penalize off-peak usage to our environmental detriment. They should be phased out. - Highlights: → Off-peak electricity for residences is priced at 331% above marginal cost in the US. → This inefficiently deters vehicle electrification that could reduce GHG emissions. → 9% of U.S. households have the 'smart' meters necessary for time-of-use rates. → Time-invariant rates cause substantial environmental harm and should be phased out.
Power systems locational marginal pricing in deregulated markets

Science.gov (United States)

Wang, Hui-Fung Francis

Since the beginning of the 1990s, the electricity business is transforming from a vertical integrating business to a competitive market operations. The generation, transmission, distribution subsystem of an electricity utility are operated independently as Genco (generation subsystem), Transco (transmission subsystem), and Distco (distribution subsystem). This trend promotes more economical inter- and intra regional transactions to be made by the participating companies and the users of electricity to achieve the intended objectives of deregulation. There are various types of electricity markets that are implemented in the North America in the past few years. However, transmission congestion management becomes a key issue in the electricity market design as more bilateral transactions are traded across long distances competing for scarce transmission resources. It directly alters the traditional concept of energy pricing and impacts the bottom line, revenue and cost of electricity, of both suppliers and buyers. In this research, transmission congestion problem in a deregulated market environment is elucidated by implementing by the Locational Marginal Pricing (LMP) method. With a comprehensive understanding of the LMP method, new mathematical tools will aid electric utilities in exploring new business opportunities are developed and presented in this dissertation. The dissertation focuses on the development of concept of (LMP) forecasting and its implication to the market participants in deregulated market. Specifically, we explore methods of developing fast LMP calculation techniques that are differ from existing LMPs. We also explore and document the usefulness of the proposed LMP in determining electricity pricing of a large scale power system. The developed mathematical tools use of well-known optimization techniques such as linear programming that are support by several flow charts. The fast and practical security constrained unit commitment methods are the
Marginal abatement cost curves in general equilibrium: The influence of world energy prices

International Nuclear Information System (INIS)

Klepper, Gernot; Peterson, Sonja

2006-01-01

Marginal abatement cost curves (MACCs) are a favorite instrument to analyze international emissions trading. This paper focuses on the question of how to define MACCs in a general equilibrium context where the global abatement level influences energy prices and in turn national MACCs. We discuss the mechanisms theoretically and then use the CGE model DART for quantitative simulations. The result is, that changes in energy prices resulting from different global abatement levels do indeed affect national MACCs. Also, we compare different possibilities of defining MACCs-of which some are robust against changes in energy prices while others vary considerably. (author)
Increasing Profit Margins of Innovations: An Empirical Analysis of Firm's Pricing Practices

NARCIS (Netherlands)

Ingenbleek, P.T.M.; Frambach, R.T.; Verhallen, Th.M.M.

2004-01-01

Abstract This paper examines the impact of pricing practices that refer to the use of customer value, competition, and costs information, on the relative profit margin of a new product. Hypotheses suggest that the effects of these practices are contingent on relative product advantage and the
Ontario electricity outlook : smaller reserve margins and higher prices

International Nuclear Information System (INIS)

Alexander, C.; Kalevar, P.

2002-01-01

Privatization of Hydro One has been delayed, but this will not postpone the scheduled launch of restructuring the electricity markets in Ontario on May 1, 2002. The main concern of Ontario consumers is whether they will undergo an energy crisis such as the one experienced in California. A report released in February 2002 stated that electricity bills will be higher under the new electricity regime. It appears that electricity supply reserve margins will be tighter than originally thought, raising price volatility in the summer and fall. The authors claim that the chance for an energy crisis are low because of the added generating capacity. However, regardless of whether consumers sign a fixed term price contract with retailers, it is likely that electricity bills will be higher in 2002 and 2003. The Independent Electricity Market Operator (IMO) is assuring the public that the power generation resources currently available are sufficient to meet expected demand. However, in June through July, it is possible that reserves will fall short. It is also evident that charges for distribution, transmission and other services will be higher under the restructured system. Electricity bills are likely to be about 5 to 15 per cent higher in 2003 than they were before March 1, 2002. Higher prices might not last indefinitely. Initially, they will be used to pay off the debt, but competition and opportunities for profit should allow for greater efficiencies and innovation in Ontario's electricity system and prices could potentially fall lower than pre-deregulation prices. 1 tab., 3 figs
Electricity market auction settings in a future Danish electricity system with a high penetration of renewable energy sources - A comparison of marginal pricing and pay-as-bid

International Nuclear Information System (INIS)

Nielsen, Steffen; Sorknaes, Peter; Ostergaard, Poul Alberg

2011-01-01

The long-term goal for Danish energy policy is to be free of fossil fuels through the increasing use of renewable energy sources (RES) including fluctuating renewable electricity (FRE). The Danish electricity market is part of the Nordic power exchange, which uses a Marginal Price auction system (MPS) for the day-ahead auctions. The market price is thus equal to the bidding price of the most expensive auction winning unit. In the MPS, the FRE bid at prices of or close to zero resulting in reduced market prices during hours of FRE production. In turn, this reduces the FRE sources' income from market sales. As more FRE is implemented, this effect will only become greater, thereby reducing the income for FRE producers. Other auction settings could potentially help to reduce this problem. One candidate is the pay-as-bid auction setting (PAB), where winning units are paid their own bidding price. This article investigates the two auction settings, to find whether a change of auction setting would provide a more suitable frame for large shares of FRE. This has been done with two energy system scenarios with different shares of FRE. From the analysis, it is found that MPS is generally better for the FRE sources. The result is, however, very sensitive to the base assumptions used for the calculations. -- Highlights: → In this study two different auction settings for the Danish electricity market are compared. → Two scenarios are used in the analyses, one representing the present system and one representing a future 100% renewable energy system. → We find that marginal price auction system is most suitable for supporting fluctuating renewable energy in both scenarios. → The results are very sensitive to the assumptions about bidding prices for each technology.
The impact of power market reforms on electricity price-cost margins and cross-subsidy levels: A cross country panel data analysis

International Nuclear Information System (INIS)

Erdogdu, Erkan

2011-01-01

One of the main expectations from power market reform has been a reduction in both price-cost margins and cross-subsidy levels between industrial and residential consumers. This paper focuses on this issue by looking at the impact of the electricity industry reforms on residential and industrial electricity price-cost margins and their effect on cross-subsidy levels between consumer groups. Using panel data for 63 developed and developing countries covering the period 1982-2009, empirical models are developed and analyzed. The research findings suggest that there is no uniform pattern for the impact of reform process as a whole on price-cost margins and cross-subsidy levels. Each individual reform step has different impact on price-cost margins and cross-subsidy levels for each consumer and country group. Our findings imply that reform steps have different impacts in different countries, which supports the idea reform prescription for a specific country cannot easily and successfully be transferred to another one. So, transferring the formal and economic structure of a successful power market in a developed country to developing countries is not a sufficient condition for good economic performance of the electricity industries in developing countries. Furthermore, the study suggests that power consumption, income level and country-specific features constitute other important determinants of electricity price-cost margins and cross-subsidy levels. - Research highlights: → The paper focuses on the impact of power market reforms on price-cost margins and cross-subsidy levels. → Using panel data for 63 countries for the period 1982-2009, empirical models are developed and analyzed. → We found that each individual reform step has different impact for each consumer and country group. → We conclude that reform prescription for a specific country cannot easily be transferred to another one.
Three-Phase AC Optimal Power Flow Based Distribution Locational Marginal Price: Preprint

Energy Technology Data Exchange (ETDEWEB)

Yang, Rui; Zhang, Yingchen

2017-05-17

Designing market mechanisms for electricity distribution systems has been a hot topic due to the increased presence of smart loads and distributed energy resources (DERs) in distribution systems. The distribution locational marginal pricing (DLMP) methodology is one of the real-time pricing methods to enable such market mechanisms and provide economic incentives to active market participants. Determining the DLMP is challenging due to high power losses, the voltage volatility, and the phase imbalance in distribution systems. Existing DC Optimal Power Flow (OPF) approaches are unable to model power losses and the reactive power, while single-phase AC OPF methods cannot capture the phase imbalance. To address these challenges, in this paper, a three-phase AC OPF based approach is developed to define and calculate DLMP accurately. The DLMP is modeled as the marginal cost to serve an incremental unit of demand at a specific phase at a certain bus, and is calculated using the Lagrange multipliers in the three-phase AC OPF formulation. Extensive case studies have been conducted to understand the impact of system losses and the phase imbalance on DLMPs as well as the potential benefits of flexible resources.
articles: The implementation of marginal external cost pricing in road transport Long run vs short run and first-best vs second-best

OpenAIRE

Erik T. Verhoef

2000-01-01

This article discusses a number of issues that will become increasingly important now that the concept of marginal external cost pricing becomes more likely to be implemented as a policy strategy in transport in reality. The first part of the article deals with the long-run efficiency of marginal external cost pricing. It is shown that such prices not only optimize short-run mobility, given the shape and position of the relevant demand and cost curves, but even more importantly, also optimall...
Why do stumpage prices increase more than lumber prices?

Science.gov (United States)

William G. Luppold; John E. Baumgras; John E. Baumgras

1998-01-01

Every sawmiller who has been in business more than 5 years realizes that hardwood stumpage prices tend to increase faster than lumber prices, decreasing the margin between these two prices. Although increases in stumpage versus lumber prices are readily apparent, the reason for the decrease in the margin is not. Recent research findings indicate that the stumpage/...
Second best pricing policies for an exhaustible resource

Energy Technology Data Exchange (ETDEWEB)

Hanson, D.A.

1977-02-01

In the theory of exhaustible resources, the classical result, originally derived by Harold Hotelling (J. Polit. Econ., 39: 137-75 (1931)) is that the scarcity rent of the resource must increase at the rate of interest. The scarcity rent is the market price of the resource less extraction costs. At the depletion time, the market price must be equal either to the zero demand price or the cost of a perfect substitute, assuming no adjustment costs in switching to the substitute. The substitute may be either a natural resource with a higher extraction cost or a backstop technology. The Hotelling result is a price equilibrium condition in a competitive asset market (Solow, Amer. Econ. Rev. Proc., 64: 1-14 (1974)). It is also an efficiency condition for allocating the resource over time in a first best world. However, Solow raises the possibility that constraints creating a wedge between interest rates may be important considerations in the resource allocation problem. In a second-best world it is not at all clear how fast the scarcity rent of the resource should increase from a social viewpoint. However, for one simple case the analysis of this problem is straightforward. Suppose consumption is determined by a Keynesian consumption function with marginal propensity to consume (1 - s); s is marginal propensity to save. With consumption determined in this behavioral manner, savings may be inadequate to reduce the market interest rate to the point where it is equal to the social rate of time preference. It is argued here that for this case the scarcity rent of the resource should increase at a rate equal to a weighted combination of these two interest rates.
Supply amount and marginal price of renewable electricity under the renewables portfolio standard in Japan

International Nuclear Information System (INIS)

Nishio, Kenichiro; Asano, Hiroshi

2006-01-01

The Renewables Portfolio Standard (RPS) in Japan requires that approximately 1.35% of each retail supplier's electricity sales in FY2010 come from renewable energy sources (RES), for example, photovoltaics, wind, biomass, geothermal, and small hydropower. To help retail suppliers and renewable generators develop effective strategies, this study provides a quantitative analysis of the impact of this measure. We assume the supply conditions for electricity generation from renewable energy sources (RES-E) based on regional resource endowments, and we derive the cost-effective compositions of renewable portfolios, RES-E certificate prices, and additional costs to retail suppliers. The future prospects of RES-E are assessed based on technology, region, and year up to FY2010. The analysis reveals that wind power and biomass power generated from municipal waste will provide the majority of the total supply of RES-E under the RPS. It also indicates that the marginal price of RES-E certificates will be approximately 5.8 JPY/kWh (5.2 USc/kWh) in FY2010, in the case wherein the marginal price of electricity is assumed to be 4 JPY/kWh (3.6 USc/kWh). In order to elaborate on this further, sensitivity analyses for some parameters of RES and the price of electricity are provided. The dynamic supply curves of RES-E certificates are also indicated. (author)
Supply amount and marginal price of renewable electricity under the renewables portfolio standard in Japan

International Nuclear Information System (INIS)

Nishio, Kenichiro; Asano, Hiroshi

2006-01-01

The Renewables Portfolio Standard (RPS) in Japan requires that approximately 1.35% of each retail supplier's electricity sales in FY2010 come from renewable energy sources (RES), for example, photovoltaics, wind, biomass, geothermal, and small hydropower. To help retail suppliers and renewable generators develop effective strategies, this study provides a quantitative analysis of the impact of this measure. We assume the supply conditions for electricity generation from renewable energy sources (RES-E) based on regional resource endowments, and we derive the cost-effective compositions of renewable portfolios, RES-E certificate prices, and additional costs to retail suppliers. The future prospects of RES-E are assessed based on technology, region, and year up to FY2010. The analysis reveals that wind power and biomass power generated from municipal waste will provide the majority of the total supply of RES-E under the RPS. It also indicates that the marginal price of RES-E certificates will be approximately 5.8 JPY/kWh (5.2 USc/kWh) in FY2010, in the case wherein the marginal price of electricity is assumed to be 4 JPY/kWh (3.6 USc/kWh). In order to elaborate on this further, sensitivity analyses for some parameters of RES and the price of electricity are provided. The dynamic supply curves of RES-E certificates are also indicated
Supply amount and marginal price of renewable electricity under the renewables portfolio standard in Japan

Energy Technology Data Exchange (ETDEWEB)

Nishio, Kenichiro; Asano, Hiroshi [Central Research institute of Electric Power Industry, Tokyo (Japan). Socio-economic Research Center

2006-10-15

The Renewables Portfolio Standard (RPS) in Japan requires that approximately 1.35% of each retail supplier's electricity sales in FY2010 come from renewable energy sources (RES), for example, photovoltaics, wind, biomass, geothermal, and small hydropower. To help retail suppliers and renewable generators develop effective strategies, this study provides a quantitative analysis of the impact of this measure. We assume the supply conditions for electricity generation from renewable energy sources (RES-E) based on regional resource endowments, and we derive the cost-effective compositions of renewable portfolios, RES-E certificate prices, and additional costs to retail suppliers. The future prospects of RES-E are assessed based on technology, region, and year up to FY2010. The analysis reveals that wind power and biomass power generated from municipal waste will provide the majority of the total supply of RES-E under the RPS. It also indicates that the marginal price of RES-E certificates will be approximately 5.8 JPY/kWh (5.2 USc/kWh) in FY2010, in the case wherein the marginal price of electricity is assumed to be 4 JPY/kWh (3.6 USc/kWh). In order to elaborate on this further, sensitivity analyses for some parameters of RES and the price of electricity are provided. The dynamic supply curves of RES-E certificates are also indicated. (author)
Distribution Locational Marginal Pricing for Optimal Electric Vehicle Charging through Chance Constrained Mixed-Integer Programming

DEFF Research Database (Denmark)

Liu, Zhaoxi; Wu, Qiuwei; Oren, Shmuel S.

2017-01-01

This paper presents a distribution locational marginal pricing (DLMP) method through chance constrained mixed-integer programming designed to alleviate the possible congestion in the future distribution network with high penetration of electric vehicles (EVs). In order to represent the stochastic...
Cost-Benefit Analysis and the Marginal Cost of Public Funds

OpenAIRE

Lundholm, Michael

2005-01-01

The marginal cost of public funds defined as the ratio between the shadow price of tax revenues and the population average of the social marginal utility of income, is analysed within an explicit cost–benefit context. It is shown that for an optimal tax system the measure is always equal to one. Benefit and cost measures congruent with this definition are derived. Under optimal taxes a positive net social benefit is a necessary and sufficient condition for a project that passes the cost–benef...
ACCOUNTING ASPECTS OF PRICING AND TRANSFER PRICING

Directory of Open Access Journals (Sweden)

TÜNDE VERES

2011-01-01

Full Text Available The pricing methods in practice need really complex view of the business situation and depend on the strategy and market position of a company. The structure of a price seems simple: cost plus margin. Both categories are special area in the management accounting. Information about the product costs, the allocation methodologies in cost accounting, the analyzing of revenue and different level of the margin needs information from accounting system. This paper analyzes the pricing methods from management accounting aspects to show out the role of the accounting system in the short term and long term pricing and transfer pricing decisions.
Higher US crop prices trigger little area expansion so marginal land for biofuel crops is limited

International Nuclear Information System (INIS)

Swinton, Scott M.; Babcock, Bruce A.; James, Laura K.; Bandaru, Varaprasad

2011-01-01

By expanding energy biomass production on marginal lands that are not currently used for crops, food prices increase and indirect climate change effects can be mitigated. Studies of the availability of marginal lands for dedicated bioenergy crops have focused on biophysical land traits, ignoring the human role in decisions to convert marginal land to bioenergy crops. Recent history offers insights about farmer willingness to put non-crop land into crop production. The 2006-09 leap in field crop prices and the attendant 64% gain in typical profitability led to only a 2% increase in crop planted area, mostly in the prairie states. At this rate, a doubling of expected profitability from biomass crops would expand cropland supply by only 3.2%. Yet targets for cellulosic ethanol production in the US Energy Independence and Security Act imply boosting US planted area by 10% or more with perennial biomass crops. Given landowner reluctance to expand crop area with familiar crops in the short run, large scale expansion of the area in dedicated bioenergy crops will likely be difficult and costly to achieve. - Highlights: → Biofuel crops on cropland can displace food crops, reducing food supply and triggering indirect land use. → Growing biofuel crops on non-crop marginal land avoids these problems. → But US farmers expanded cropland by only 2% when crop profitability jumped 64% during 2006-09. → So medium-term availability of marginal lands for biofuel crops is limited and costly.
On the global economic potentials and marginal costs of non-renewable resources and the price of energy commodities

International Nuclear Information System (INIS)

Mercure, Jean-François; Salas, Pablo

2013-01-01

A model is presented in this work for simulating endogenously the evolution of the marginal costs of production of energy carriers from non-renewable resources, their consumption, depletion pathways and timescales. Such marginal costs can be used to simulate the long term average price formation of energy commodities. Drawing on previous work where a global database of energy resource economic potentials was constructed, this work uses cost distributions of non-renewable resources in order to evaluate global flows of energy commodities. A mathematical framework is given to calculate endogenous flows of energy resources given an exogenous commodity price path. This framework can be used in reverse in order to calculate an endogenous marginal cost of production of energy carriers given an exogenous carrier demand. Using rigid price inelastic assumptions independent of the economy, these two approaches generate limiting scenarios that depict extreme use of natural resources. This is useful to characterise the current state and possible uses of remaining non-renewable resources such as fossil fuels and natural uranium. The theory is however designed for use within economic or technology models that allow technology substitutions. In this work, it is implemented in the global power sector model FTT:Power. Policy implications are given. - Highlights: • Theoretical model to forecast marginal costs of non-renewable resources. • Tracks the consumption and costs of non-renewable resources. • For use in economic or technology models
The Price-Marginal Cost Markup and its Determinants in U.S. Manufacturing

OpenAIRE

Mazumder, Sandeep

2009-01-01

This paper estimates the price-marginal cost markup for US manufacturing using a new methodology. Most existing techniques of estimating the markup are a variant on Hall's (1988) framework involving the manipulation of the Solow Residual. However this paper argues that this notion is based on the unreasonable assumption that labor can be costlessly adjusted at a fixed wage rate. By relaxing this assumption, we are able to derive a generalized markup index, which when estimated using manufactu...

Electricity pricing

International Nuclear Information System (INIS)

Wijayatunga, P.D.C.

1994-01-01

Electricity pricing in most countries, especially in the developing world, has been determined by traditional accounting criteria where it raises revenue requirements to cover the operating costs and a return on past and future capital investments in possible power systems. The use of economic principles to improve the total economic efficiency in the electricity industry is discussed. Basic marginal cost theory, long run marginal costing (LRMC) cost categories and rating periods, marginal capacity costs, marginal energy costs, consumer costs, short run marginal costing (SRMC), marginal cost of fuel, marginal cost of network losses, market clearing price, value of unserved energy and network quality of supply cost are discussed
ACCOUNTING ASPECTS OF PRICING AND TRANSFER PRICING

OpenAIRE

TÜNDE VERES

2011-01-01

The pricing methods in practice need really complex view of the business situation and depend on the strategy and market position of a company. The structure of a price seems simple: cost plus margin. Both categories are special area in the management accounting. Information about the product costs, the allocation methodologies in cost accounting, the analyzing of revenue and different level of the margin needs information from accounting system. This paper analyzes the pricing methods from m...
Pricing of Fluctuations in Electricity Markets

OpenAIRE

Tsitsiklis, John N.; Xu, Yunjian

2012-01-01

In an electric power system, demand fluctuations may result in significant ancillary cost to suppliers. Furthermore, in the near future, deep penetration of volatile renewable electricity generation is expected to exacerbate the variability of demand on conventional thermal generating units. We address this issue by explicitly modeling the ancillary cost associated with demand variability. We argue that a time-varying price equal to the suppliers' instantaneous marginal cost may not achieve s...
General interest and investment. Long-term marginal cost and pricing at Electricite de France (1948-1949)

International Nuclear Information System (INIS)

Yon, Guillaume

2014-01-01

The paper investigates the construction of a concept in economic theory, long-term marginal cost pricing. It does so by exploring the work done within electricite de France in 1948-1949 by a group of engineer-economists who came out with the notion while they were engaged in completely remaking the pricing policy of the new public monopoly. I will show that the concept envisages a large-scale reorganization of the national power generation capacity in order to enact a certain conception of the general interest in the electric sector
The Effectiveness of Competition Policy and the Price-Cost Margin: Evidence from Panel Data

OpenAIRE

Patrick McCloughan; Seán Lyons; William Batt

2007-01-01

This paper presents robust panel data econometric evidence suggesting that more effective competition policy curtails the exercise of market power because countries in which competition policy is judged to be more effective are characterised by lower market price-cost margins, controlling for other factors, including market growth, import penetration and spare capacity. The measure of competition policy effectiveness incorporated into our analysis is the annual survey-based ratings of nationa...
Modeling the return and volatility of the Greek electricity marginal system price

International Nuclear Information System (INIS)

Theodorou, Petros; Karyampas, Dimitrios

2008-01-01

Traditional cost based optimization models (WASP) for expansion planning do not allow for mark-to-market valuation and cannot satisfy arbitrage free requirements. This work will fill this gap by developing and estimating models for mark-to-market valuation. Furthermore the present paper examines the return and volatility of the newly born Greek's electricity market's marginal system price. A detailed description of the market mechanism and regulation is used to describe how prices are determined in order to proceed with return and volatility modeling. Continuous time mean reverting and time varying mean reverting stochastic processes have been solved in discrete time processes and estimated econometrically along with ARMAX and GARCH models. It was found that GARCH model gave much better estimation and forecasting ability. Strong persistence in mean has been found giving suspicions of market inefficiency and strong incentives for arbitrage opportunities. Finally, the change in the regulatory framework has been controlled and found to have significant impact. (author)
Regulated and unregulated Nordic retail prices

International Nuclear Information System (INIS)

Johnsen, Tor Arnt; Olsen, Ole Jess

2011-01-01

Nordic residential electricity consumers can now choose among a number of contracts and suppliers. A large number of households have continued to purchase electricity from the incumbent supplier at default contract terms. In this paper, we compare the situation for such passive customers. Danish default prices are regulated whereas default prices in the other countries are unregulated. Systematic price differences exist among the Nordic countries. However, as wholesale prices sometimes differ the gross margin is a more relevant indicator. Regulated gross margins are lower in Denmark than in Sweden but higher than in Norway and Finland. Because of market design Norwegian default contracts are competitive whereas Swedish contracts provide the retailer with some market power. We interpret the low Finnish margins as a result of municipal retailers continuing traditional pricing from the monopoly period. Danish margins are higher than the competitive Norwegian margins but are earned from a much lower level of consumption. The annually margins earned per consumer are very close in the two countries, which indicates that the Danish regulation is achieving its objective of approaching competitive prices. - Highlights: → Prices of active and passive Nordic residential electricity consumers are compared. → Active consumers get lower prices in Sweden but not in Norway. → Prices of passive consumers differ considerably among the four Nordic countries. → Danish regulated prices compare well with unregulated prices in the other countries. → Passive consumers in Finland have low prices compared with the other countries.
Regulated and unregulated Nordic retail prices

Energy Technology Data Exchange (ETDEWEB)

Johnsen, Tor Arnt, E-mail: tor.a.johnsen@bi.no [Norwegian School of Management BI, NO-0442 Oslo (Norway); Olsen, Ole Jess, E-mail: ojo@ruc.dk [Department of Environmental, Social and Spatial Change (ENSPAC), Roskilde University, Building 10.1, Universitetsvej 1, DK-4000, Roskilde (Denmark)

2011-06-15

Nordic residential electricity consumers can now choose among a number of contracts and suppliers. A large number of households have continued to purchase electricity from the incumbent supplier at default contract terms. In this paper, we compare the situation for such passive customers. Danish default prices are regulated whereas default prices in the other countries are unregulated. Systematic price differences exist among the Nordic countries. However, as wholesale prices sometimes differ the gross margin is a more relevant indicator. Regulated gross margins are lower in Denmark than in Sweden but higher than in Norway and Finland. Because of market design Norwegian default contracts are competitive whereas Swedish contracts provide the retailer with some market power. We interpret the low Finnish margins as a result of municipal retailers continuing traditional pricing from the monopoly period. Danish margins are higher than the competitive Norwegian margins but are earned from a much lower level of consumption. The annually margins earned per consumer are very close in the two countries, which indicates that the Danish regulation is achieving its objective of approaching competitive prices. - Highlights: > Prices of active and passive Nordic residential electricity consumers are compared. > Active consumers get lower prices in Sweden but not in Norway. > Prices of passive consumers differ considerably among the four Nordic countries. > Danish regulated prices compare well with unregulated prices in the other countries. > Passive consumers in Finland have low prices compared with the other countries.
Regulated and unregulated Nordic retail prices

DEFF Research Database (Denmark)

Olsen, Ole Jess; Johnsen, Tor Arnt

2011-01-01

in Sweden but higher than in Norway and Finland. Because of market design Norwegian default contracts are competitive whereas Swedish contracts provide the retailer with some market power. We interpret the low Finnish margins as a result of municipal retailers continuing traditional pricing from...... competitive prices....... default prices are regulated whereas default prices in the other countries are unregulated. Systematic price differences exist among the Nordic countries. However, as wholesale prices sometimes differ the gross margin is a more relevant indicator. Regulated gross margins are lower in Denmark than...
Reliability-Based Marginal Cost Pricing Problem Case with Both Demand Uncertainty and Travelers’ Perception Errors

Directory of Open Access Journals (Sweden)

Shaopeng Zhong

2013-01-01

Full Text Available Focusing on the first-best marginal cost pricing (MCP in a stochastic network with both travel demand uncertainty and stochastic perception errors within the travelers’ route choice decision processes, this paper develops a perceived risk-based stochastic network marginal cost pricing (PRSN-MCP model. Numerical examples based on an integrated method combining the moment analysis approach, the fitting distribution method, and the reliability measures are also provided to demonstrate the importance and properties of the proposed model. The main finding is that ignoring the effect of travel time reliability and travelers’ perception errors may significantly reduce the performance of the first-best MCP tolls, especially under high travelers’ confidence and network congestion levels. The analysis result could also enhance our understanding of (1 the effect of stochastic perception error (SPE on the perceived travel time distribution and the components of road toll; (2 the effect of road toll on the actual travel time distribution and its reliability measures; (3 the effect of road toll on the total network travel time distribution and its statistics; and (4 the effect of travel demand level and the value of reliability (VoR level on the components of road toll.
Spatial peak-load pricing

International Nuclear Information System (INIS)

Arellano, M. Soledad; Serra, Pablo

2007-01-01

This article extends the traditional electricity peak-load pricing model to include transmission costs. In the context of a two-node, two-technology electric power system, where suppliers face inelastic demand, we show that when the marginal plant is located at the energy-importing center, generators located away from that center should pay the marginal capacity transmission cost; otherwise, consumers should bear this cost through capacity payments. Since electric power transmission is a natural monopoly, marginal-cost pricing does not fully cover costs. We propose distributing the revenue deficit among users in proportion to the surplus they derive from the service priced at marginal cost. (Author)
Nonlinear Pricing in Energy and Environmental Markets

Science.gov (United States)

Ito, Koichiro

This dissertation consists of three empirical studies on nonlinear pricing in energy and environmental markets. The first investigates how consumers respond to multi-tier nonlinear price schedules for residential electricity. Chapter 2 asks a similar research question for residential water pricing. Finally, I examine the effect of nonlinear financial rewards for energy conservation by applying a regression discontinuity design to a large-scale electricity rebate program that was implemented in California. Economic theory generally assumes that consumers respond to marginal prices when making economic decisions, but this assumption may not hold for complex price schedules. The chapter "Do Consumers Respond to Marginal or Average Price? Evidence from Nonlinear Electricity Pricing" provides empirical evidence that consumers respond to average price rather than marginal price when faced with nonlinear electricity price schedules. Nonlinear price schedules, such as progressive income tax rates and multi-tier electricity prices, complicate economic decisions by creating multiple marginal prices for the same good. Evidence from laboratory experiments suggests that consumers facing such price schedules may respond to average price as a heuristic. I empirically test this prediction using field data by exploiting price variation across a spatial discontinuity in electric utility service areas. The territory border of two electric utilities lies within several city boundaries in southern California. As a result, nearly identical households experience substantially different nonlinear electricity price schedules. Using monthly household-level panel data from 1999 to 2008, I find strong evidence that consumers respond to average price rather than marginal or expected marginal price. I show that even though this sub-optimizing behavior has a minimal impact on individual welfare, it can critically alter the policy implications of nonlinear pricing. The second chapter " How Do
Essays on microgrids, asymmetric pricing and market power in electricity markets

Science.gov (United States)

Lo Prete, Chiara

. Chapter 4 examines the possibility of asymmetric transmission of CO 2 and fuel prices to electricity futures prices in the second phase of the European Emission Trading Scheme. The goal is to assess whether output prices tend to respond more quickly to input price increases than decreases: this phenomenon is known as "rockets and feathers" in the literature. Results do not provide empirical evidence of statistically significant differences in the response of power prices to positive and negative shocks in CO 2 allowance and fuel markets. Chapter 5 re-examines the issue of the potential exercise of market power in California after liberalization, with a focus on its day-ahead energy market (the former PX) and its five largest thermal generators. The analysis focuses on a peak hour of operation (hour 18) and disregards hours in which congestion occurred. First, I define a direct measure of unilateral market power for each firm, equal to the hourly inverse elasticity of its residual demand function. The second part of the analysis aims at assessing whether the necessary conditions for the unilateral exercise of market power were satisfied in practice, based on a comparison of PX market-clearing prices, estimated marginal revenues and estimated bounds for the marginal costs of generation of each supplier. By conservatively assuming that the estimated upper bound is close to each firm's actual marginal cost of generation, the analysis suggests that in a large fraction of hours the thermal generators were acting less competitively that what implied by unilateral profit maximization. If instead I explicitly account for uncertainty in the marginal cost estimates with the introduction of a +/-10% margin on the estimated bounds, thermal generators are equally likely to bid close to their marginal costs or above them. Among the hours characterized by market-clearing prices above marginal costs, 64% present, on average, evidence of less competitive than Nash behavior. Two possible
Demand Response Design and Use Based on Network Locational Marginal Prices

DEFF Research Database (Denmark)

Morais, Hugo; Faria, Pedro; Vale, Zita

2014-01-01

Power systems have been experiencing huge changes mainly due to the substantial increase of distributed generation (DG) and the operation in competitive environments. Virtual Power Players (VPP) can aggregate several players, namely a diversity of energy resources, including distributed generation...... (DG) based on several technologies, electric storage systems (ESS) and demand response (DR). Energy resources management gains an increasing relevance in this competitive context. This makes the DR use more interesting and flexible, giving place to a wide range of new opportunities. This paper...... proposes a methodology to support VPPs in the DR programs’ management, considering all the existing energy resources (generation and storage units) and the distribution network. The proposed method is based on locational marginal prices (LMP) values. The evaluation of the impact of using DR specific...
Forecasting Day-Ahead Electricity Prices : Utilizing Hourly Prices

NARCIS (Netherlands)

E. Raviv (Eran); K.E. Bouwman (Kees); D.J.C. van Dijk (Dick)

2013-01-01

textabstractThe daily average price of electricity represents the price of electricity to be delivered over the full next day and serves as a key reference price in the electricity market. It is an aggregate that equals the average of hourly prices for delivery during each of the 24 individual
Analyzing the Effects of the Iranian Energy Subsidy Reform Plan on Short- Run Marginal Generation Cost of Electricity Using Extended Input-Output Price Model

Directory of Open Access Journals (Sweden)

Zohreh Salimian

2012-01-01

Full Text Available Subsidizing energy in Iran has imposed high costs on country's economy. Thus revising energy prices, on the basis of a subsidy reform plan, is a vital remedy to boost up the economy. While the direct consequence of cutting subsidies on electricity generation costs can be determined in a simple way, identifying indirect effects, which reflect higher costs for input factors such as labor, is a challenging problem. In this paper, variables such as compensation of employees and private consumption are endogenized by using extended Input-Output (I-O price model to evaluate direct and indirect effects of electricity and fuel prices increase on economic subsectors. The determination of the short-run marginal generation cost of electricity using I-O technique with taken into account the Iranian targeted subsidy plan's influences is the main goal of this paper. Marginal cost of electricity, in various scenarios of price adjustment of energy, is estimated for three conventional categories of thermal power plants. Our results show that the raising the price of energy leads to an increase in the electricity production costs. Accordingly, the production costs will be higher than 1000 Rials per kWh until 2014 as predicted in the beginning of the reform plan by electricity suppliers.
Policy on energy pricing

Energy Technology Data Exchange (ETDEWEB)

Webb, M. G.

1977-10-15

Some economic principles of energy pricing in a market type economy in which there is consumer sovereignty are discussed. Thus resources will be allocated via the production processes in line with the preferences of consumers as revealed by their purchases of goods and services. Prices play the crucial role of coordinating instruments in this allocative process. It is assumed that all the energy industries are in the public sector. The following topics are discussed: the specification of objectives for the energy sector; marginal cost pricing; problems associated with the measurement of marginal costs; some aspects of the environmental costs associated with energy production and use, and some issues related to time differentiated tariffs; the modification of prices to achieve financial targets; and the use of energy prices to achieve income distribution objectives.
Simple Economics of the Price-Setting Newsvendor Problem

OpenAIRE

Michael Salinger; Miguel Ampudia

2011-01-01

The Lerner relationship linking the profit-maximizing price to marginal cost and the elasticity of demand generalizes to the price-setting newsvendor, and the result resolves the puzzle over the different effects of additive and multiplicative uncertainty on the solution. Multiplicative uncertainty increases the optimal price because it increases the marginal cost of a unit sold and does not affect the markup factor. Additive uncertainty has no effect on the marginal cost of a unit sold and l...
Refining margins: recent trends

International Nuclear Information System (INIS)

Baudoin, C.; Favennec, J.P.

1999-01-01

Despite a business environment that was globally mediocre due primarily to the Asian crisis and to a mild winter in the northern hemisphere, the signs of improvement noted in the refining activity in 1996 were borne out in 1997. But the situation is not yet satisfactory in this sector: the low return on invested capital and the financing of environmental protection expenditure are giving cause for concern. In 1998, the drop in crude oil prices and the concomitant fall in petroleum product prices was ultimately rather favorable to margins. Two elements tended to put a damper on this relative optimism. First of all, margins continue to be extremely volatile and, secondly, the worsening of the economic and financial crisis observed during the summer made for a sharp decline in margins in all geographic regions, especially Asia. Since the beginning of 1999, refining margins are weak and utilization rates of refining capacities have decreased. (authors)
Forecasting Day-Ahead Electricity Prices: Utilizing Hourly Prices

OpenAIRE

Raviv, Eran; Bouwman, Kees E.; van Dijk, Dick

2013-01-01

This discussion paper led to a publication in 'Energy Economics' , 2015, 50, 227-239. The daily average price of electricity represents the price of electricity to be delivered over the full next day and serves as a key reference price in the electricity market. It is an aggregate that equals the average of hourly prices for delivery during each of the 24 individual hours. This paper demonstrates that the disaggregated hourly prices contain useful predictive information for the daily average ...

Price Regulations in a Multi-unit Uniform Price Auction

DEFF Research Database (Denmark)

Boom, Anette

not exceed the price cap whereas a selective bid cap for only the larger firms, does not guarantee this outcome. A sufficiently high bid floor always destroys pure strategy equilibria with equilibrium prices above the marginal costs, no matter whether the floor applies to all or only to relatively small......Inspired by recent regulations in the New York ICAP market we examine the effect of different price regulations on a multi-unit uniform price auction. We investigate a bid cap and a bid foor. Given suffciently high total capacities general bid caps always ensure that the market price does...
Price Regulations in a Multi-unit Uniform Price Auction

DEFF Research Database (Denmark)

Boom, Anette

Inspired by recent regulations in the New York ICAP market we examine the effect of different price regulations on a multi-unit uniform price auction. We investigate a bid cap and a bid foor. Given suffciently high total capacities general bid caps always ensure that the market price does...... not exceed the price cap whereas a selective bid cap for only the larger firms, does not guarantee this outcome. A sufficiently high bid floor always destroys pure strategy equilibria with equilibrium prices above the marginal costs, no matter whether the floor applies to all or only to relatively small...
Fortum Oil and Gas 2000: Exceptionally high price of crude oil and strong refining margins

International Nuclear Information System (INIS)

Ropponen, V.-M.

2001-01-01

Fortum intends to be an active player in the structural reorganization of the oil business by utilizing its niche position in oil refining. Fortum produces sophisticated motor fuel components, which it uses in its reformulated gasolines and sells and exports to other oil companies, even to highly demanding markets in California. The increase in the price of crude oil considerably improved the results of Oil and Gas Upstream. Similarly, an improvement in the refining margin, as well as profitable shipping operations and a strong demand for gasoline components, boosted the results of Oil Refining and Marketing. (orig.)
Integrated approach to transmission services pricing

International Nuclear Information System (INIS)

Yu, C.W.; David, A.K.

1999-01-01

The paper presents an intuitively logical split between: (a) embedded, (b) operating, and (c) expansion cost based pricing and methodologies for implementation, for transmission services. A conceptually straightforward mechanism for the equitable allocation of transmission network embedded cost recovery based on capacity-use and reliability benefit is proposed, expansion cost is charged on a long-run marginal cost basis and finally, operating cost recovery is based on short-run marginal pricing. This is followed by co-ordinating these alternatives and integrating the pricing mechanisms to achieve appropriate price signals for bulk power users of transmission systems. (author)
Inter ISO Market Coordination by Calculating Border Locational Marginal Prices

Directory of Open Access Journals (Sweden)

BABIC, A. B.

2013-05-01

Full Text Available In this paper the methodology for solving Locational Marginal Price (LMP differences (inconsistency of LMPs that arise at the boundary buses between separate power markets is proposed. The algorithm developed enables us to obtain consistent LMP values at the boundary buses between interconnected ISOs. A Primal-Dual Interior Point based optimal power flow (OPF is applied, with complete set of power system physical limit constraints, to solve a regional spot market. The OPF is implemented such that producer and consumer behaviors are modeled simultaneously, while the welfare is maximized. In this paper a generalized methodology for multiple ISOs case is proposed and later it is practically applied on two interconnected independent entities. The algorithm for approximation of cost coefficients of generators and dispatchable loads for neighboring ISOs is proposed. The developed algorithm enables participating ISOs to obtain LMPs at the boundary buses with other interconnected ISOs. By controlling interchange of electric power at the scheduled level, regional spot markets are resolved eliminating possible exercise of market power by individual interconnected ISOs. Results of proposed methodology are tested on the IEEE 118-bus power system.
Pricing transmission services

International Nuclear Information System (INIS)

Haaden, E.

1995-01-01

The price structure for transmission of electric power through the main lines in Sweden is analyzed. After deregulation of the electricity market, the main transmission lines are owned by a separate national company, with no interests from the power producers. Comparisons are made to ideal marginal price structures. 6 refs
The Basic Economics of CD-ROM Pricing.

Science.gov (United States)

Erkkila, John E.

1991-01-01

This explanation of how the basic economic model of pricing applies to the CD-ROM industry considers the supply and demand sides of the market and compares three distinct pricing strategies: (1) pricing to maximize profits; (2) average cost pricing; and (3) marginal cost pricing. (EAM)
SOCIAL MARGINALIZATION AND HEALTH

Directory of Open Access Journals (Sweden)

Marjana Bogdanović

2007-04-01

Full Text Available The 20th century was characterized by special improvement in health. The aim of WHO’s policy EQUITY IN HEALTH is to enable equal accessibility and equal high quality of health care for all citizens. More or less some social groups have stayed out of many social systems even out of health care system in the condition of social marginalization. Phenomenon of social marginalization is characterized by dynamics. Marginalized persons have lack of control over their life and available resources. Social marginalization stands for a stroke on health and makes the health status worse. Low socio-economic level dramatically influences people’s health status, therefore, poverty and illness work together. Characteristic marginalized groups are: Roma people, people with AIDS, prisoners, persons with development disorders, persons with mental health disorders, refugees, homosexual people, delinquents, prostitutes, drug consumers, homeless…There is a mutual responsibility of community and marginalized individuals in trying to resolve the problem. Health and other problems could be solved only by multisector approach to well-designed programs.
Advertising Expenditure and Consumer Prices

OpenAIRE

Ferdinand Rauch

2011-01-01

This paper studies the effect of a change in the marginal costs of advertising on advertising expenditures of firms and consumer prices across industries. It makes use of a unique policy change that caused a decrease of the taxation on advertising expenditures in parts of Austria and a simultaneous increase in other parts. Advertising expenditures move immediately in the opposite direction to the marginal costs of advertising. Simultaneously the price reaction to advertising is negative in so...
A measure of marketing price transmission in the rice market of Taiwan

Directory of Open Access Journals (Sweden)

Yuan-Ming Lee

2009-12-01

Full Text Available The goal of this paper is to test whether changes in the marketing margin betweenthe farm and the retail prices can result in an asymmetric relationship between the farm and the retail prices in the rice market of Taiwan. By separating the transaction cost variation into two regimes, this paper utilizes a two-regime TVECM with the error correction term serving as the threshold variable to create a non-linear threshold model. The empirical results show that when the marketing margin is lower than the threshold value, the market system operates freely and there is feedback between the farm and retail prices. However, when the marketing margin is higher than the threshold value, the government intervenes in the market and the causality between the farm and retail prices no longer exists. The conclusions are as follows. Changes in the marketing margin can cause the asymmetric price transmission between the farm and retail prices in Taiwan’s rice markets; therefore, ignoring the effect of the marketing margin could lead to errors in the models. When the marketing margin is higher than the threshold value, the government intervenes in the market and the causality between the two prices is broken.
Economic information from Smart Meter: Nexus Between Demand Profile and Electricity Retail Price Between Demand Profile and Electricity Retail Price

OpenAIRE

Yu, Yang; Liu, Guangyi; Zhu, Wendong; Wang, Fei; Shu, Bin; Zhang, Kai; Rajagopal, Ram; Astier, Nicolas

2016-01-01

In this paper, we demonstrate that a consumer's marginal system impact is only determined by their demand profile rather than their demand level. Demand profile clustering is identical to cluster consumers according to their marginal impacts on system costs. A profile-based uniform-rate price is economically efficient as real-time pricing. We develop a criteria system to evaluate the economic efficiency of an implemented retail price scheme in a distribution system by comparing profile cluste...
Electricity to natural gas competition under customer-side technological change: a marginal cost pricing analysis; Cambiamento tecnologico a valle del contatore e concorrenza fra elettricita' e gas naturale

Energy Technology Data Exchange (ETDEWEB)

Gulli' , Francesco [Bocconi Univ., Milan (Italy). Iefe

2004-07-01

This paper aims at evaluating the impact of technological change (on the customer side of the meter) on the network energy industry (electricity and natural gas). The performances of the small gas fired power technologies and the electrical reversible heat pumps have improved remarkably over the last ten years, making possible (or more viable) two opposite technological trajectories: the fully gas-based system, based on the use of small CHP (combined heat and power generation) plants, which would involve a wide decentralisation of energy supply; the fully electric-based system, based on the use of reversible electric heat pumps, which would imply increasing centralisation of energy supply. The analysis described in this paper attempts to evaluate how these two kinds of technological solutions can impact on inter-service competition when input prices are ste equals to marginal costs of supply in each stage of the electricity and natural gas industries. For this purpose, unbundled prices over time and over space are simulated. In particular the paper shows that unbundling prices over space in not very important in affecting electricity to natural gas competition and that, when prices are set equal to long-run marginal costs, the fully electric-based solution (the reversible heat pump) is by far preferable to the fully gas-based solution (the CHP gas fired small power plant). In consequence, the first best outcome of the technological change would involve increasing large power generation and imported (from the utility grid) electricity consumption. Given this framework, we have to ask ourselves why operators, regulators and legislators are so optimistic about the development of the fully gas-based solutions. In this respect, the paper suggests that market distortions (such as market power, energy taxation and inefficient pricing regulation) might have give an ambiguous representation of the optimal technological trajectory, inducing to overestimate the social value
Oil market prices 1989/1990

International Nuclear Information System (INIS)

Jenkins, G.

1991-01-01

There are many oil markets. Oil Market Prices lists the markets, provides statistics on prices and the volumes of trade, analyses the price structures in the markets and provides supplementary information on ocean freight rates and oil refining margins. Oil Market Prices will serve as a permanent record of crude oil prices including those quoted on the futures and forward markets, the many wholesale prices for refined oil products, prices consumers pay and the average prices received by the oil companies. In all instances the sources of the statistics are given together with comprehensive listing of alternative sources. (Author)
The welfare effects of different pricing schemes for electricity distribution in Finland

International Nuclear Information System (INIS)

Kopsakangas-Savolainen, Maria

2004-01-01

The main components of electricity prices can be divided into the wholesale price, the price of network operations and taxes. Even if the wholesale price is determined efficiently, total welfare can be significantly disturbed if network operations are priced inefficiently. In this study, we calculate network prices based on four alternative methods. These are marginal cost pricing, Ramsey pricing, FDC-pricing and optimal two-part tariffs. The welfare effects on the prevailing pricing system are compared. We show that potentially significant improvements in welfare can be achieved by using marginal cost prices or optimal two-part tariffs. Also Ramsey pricing indicates that prevailing prices are inefficient
The welfare effects of different pricing schemes for electricity distribution in Finland

International Nuclear Information System (INIS)

Kopsakangas-Savolainen, Maria

2004-01-01

The main components of electricity prices can be divided into the wholesale price, the price of network operations and taxes. Even if the wholesale price is determined efficiently, total welfare can be significantly disturbed if network operations are priced inefficiently. In this study, we calculate network prices based on four alternative methods. These are marginal cost pricing, Ramsey pricing, FDC-pricing and optimal two-part tariffs. The welfare effects on the prevailing pricing system are compared. We show that potentially significant improvements in welfare can be achieved by using marginal cost prices or optimal two-part tariffs. Also Ramsey pricing indicates that prevailing prices are inefficient. (Author)
Inventories and upstream gasoline price dynamics

NARCIS (Netherlands)

Kuper, Gerard H.

This paper sheds new light on the asymmetric dynamics in upstream U.S. gasoline prices. The model is based on Pindyck's inventory model of commodity price dynamics. We show that asymmetry in gasoline price dynamics is caused by changes in the net marginal convenience yield: higher costs of marketing
Regional Mc parity: do common pricing points reduce deviations from the law of one price?

OpenAIRE

Mathä, Thomas Y.

2009-01-01

Abstract This paper analyses price differences of McDonald?s products in four different countries. I show that pricing at pricing points in different currencies may contribute to explaining deviations from the law of one price. Observing strictly equal prices is more probable if prices are set at psychological and fractional pricing points in a common currency. The latter is also found to reduce the size of price deviations. Additionally, price differences increase as transaction c...
Toward a new spacecraft optimal design lifetime? Impact of marginal cost of durability and reduced launch price

Science.gov (United States)

Snelgrove, Kailah B.; Saleh, Joseph Homer

2016-10-01

The average design lifetime of satellites continues to increase, in part due to the expectation that the satellite cost per operational day decreases monotonically with increased design lifetime. In this work, we challenge this expectation by revisiting the durability choice problem for spacecraft in the face of reduced launch price and under various cost of durability models. We first provide a brief overview of the economic thought on durability and highlight its limitations as they pertain to our problem (e.g., the assumption of zero marginal cost of durability). We then investigate the merging influence of spacecraft cost of durability and launch price, and we identify conditions that give rise cost-optimal design lifetimes that are shorter than the longest lifetime technically achievable. For example, we find that high costs of durability favor short design lifetimes, and that under these conditions the optimal choice is relatively robust to reduction in launch prices. By contrast, lower costs of durability favor longer design lifetimes, and the optimal choice is highly sensitive to reduction in launch price. In both cases, reduction in launch prices translates into reduction of the optimal design lifetime. Our results identify a number of situations for which satellite operators would be better served by spacecraft with shorter design lifetimes. Beyond cost issues and repeat purchases, other implications of long design lifetime include the increased risk of technological slowdown given the lower frequency of purchases and technology refresh, and the increased risk for satellite operators that the spacecraft will be technologically obsolete before the end of its life (with the corollary of loss of value and competitive advantage). We conclude with the recommendation that, should pressure to extend spacecraft design lifetime continue, satellite manufacturers should explore opportunities to lease their spacecraft to operators, or to take a stake in the ownership
Marginal CO2 cost pass-through under imperfect competition in power markets

International Nuclear Information System (INIS)

Chernyavs'ka, Liliya; Gulli, Francesco

2008-01-01

In line with economic theory, carbon ETS determines a rise in marginal cost equal to the carbon opportunity cost regardless of whether carbon allowances are allocated free of charge or not. This paper aims at evaluating to what extent firms in imperfectly competitive markets will pass-through into electricity prices the increase in cost. By using the load duration curve approach and the dominant firm with competitive fringe model, we show that the result is ambiguous. The increase in price can be either lower or higher than the marginal CO 2 cost, depending on several structural factors: the degree of market concentration, the available capacity (whether there is excess capacity or not), the power plant mix in the market and the power demand level (peak vs. off-peak hours). The empirical analysis of the Italian context (an emblematic case of imperfectly competitive market), which can be split into four sub-markets with different structural features, provides a contribution supporting the model predictions. Market power, therefore, would determine a significant deviation from the 'full pass-through' rule but we cannot know the sign of this deviation, a priori, i.e. without before taking carefully into account the structural features of the power market. (author)
The pass through of oil prices into euro area consumer liquid fuel prices in an environment of high and volatile oil prices

Energy Technology Data Exchange (ETDEWEB)

Meyler, Aidan [European Central Bank, Frankfurt am Main (Germany)

2009-11-15

Crude and refined oil prices have been relatively high and volatile on a sustained basis since 1999. This paper considers the pass through of oil prices into consumer liquid (i.e. petrol, diesel and heating) fuel prices in such an environment. The pass through of oil prices into consumer liquid fuel prices has already been addressed extensively in the literature. Nonetheless much of this literature has either focused on the United States or on a time period when oil prices were relatively stable, or has used monthly data. The main contribution of this paper is a comprehensive combination of many features that have been considered before but rarely jointly. These features include: (1) the analysis of the euro area as an aggregate and a large number of countries (the initial 12 member states); (2) the consideration of different time periods; (3) the modelling of the data in raw levels rather than in log levels. This turns out to have important implications for our findings; (4) the use of high frequency (weekly) data, which, as results will suggest, are the lowest frequency one should consider; (5) the investigation of the different stages of the production chain from crude oil prices to retail distribution - refining costs and margins, distribution and retailing costs and margins; (6) the examination of prices including and excluding taxes - excise and value-added; (7) the modelling of prices for three fuel types - passenger car petrol and diesel separately and home heating fuel oil; (8) lastly we also address the issue of possible asymmetries, allowing for the pass through to vary according to (a) whether price are increasing or decreasing and (b) whether price levels are above or below their equilibrium level. The main findings are as follows: First, as distribution and retailing costs and margins have been broadly stable on average, the modelling of the relationship between consumer prices excluding taxes and upstream prices in raw levels rather than in

The pass through of oil prices into euro area consumer liquid fuel prices in an environment of high and volatile oil prices

International Nuclear Information System (INIS)

Meyler, Aidan

2009-01-01

Crude and refined oil prices have been relatively high and volatile on a sustained basis since 1999. This paper considers the pass through of oil prices into consumer liquid (i.e. petrol, diesel and heating) fuel prices in such an environment. The pass through of oil prices into consumer liquid fuel prices has already been addressed extensively in the literature. Nonetheless much of this literature has either focused on the United States or on a time period when oil prices were relatively stable, or has used monthly data. The main contribution of this paper is a comprehensive combination of many features that have been considered before but rarely jointly. These features include: (1) the analysis of the euro area as an aggregate and a large number of countries (the initial 12 member states); (2) the consideration of different time periods; (3) the modelling of the data in raw levels rather than in log levels. This turns out to have important implications for our findings; (4) the use of high frequency (weekly) data, which, as results will suggest, are the lowest frequency one should consider; (5) the investigation of the different stages of the production chain from crude oil prices to retail distribution - refining costs and margins, distribution and retailing costs and margins; (6) the examination of prices including and excluding taxes - excise and value-added; (7) the modelling of prices for three fuel types - passenger car petrol and diesel separately and home heating fuel oil; (8) lastly we also address the issue of possible asymmetries, allowing for the pass through to vary according to (a) whether price are increasing or decreasing and (b) whether price levels are above or below their equilibrium level. The main findings are as follows: First, as distribution and retailing costs and margins have been broadly stable on average, the modelling of the relationship between consumer prices excluding taxes and upstream prices in raw levels rather than in
Pricing products: juxtaposing affordability with quality appeal.

Science.gov (United States)

1984-01-01

Choosing appropriate product prices is 1 of the most crucial steps in creating an effective contraceptive social marketing (CSM) sales campaign. The Social Marketing Forum conducted an informal survey of social marketing project managers, international contractors, and marketing consultants to determine how CSM programs cope with pricing problems and ways to circumvent some obstacles. According to Diana Altman, a family planning consultant, low prices that make products available to needy individuals are more important than the program's self sufficiency, yet if prices are too low, consumers think the products were unusable in the US and thus were dumped on local markets. Other key factors include commercial competition, spiraling inflation rates, and problems with rising prices and retailer/distributor margins. A sampling of per capita gross national products indicates the poverty level of most CSM projects' target market. Consequently, CSM projects must set low pices, regardless of program operating costs. The goal often is to increase the demand and availability for contraceptives. The fact that social marketing products must pass through retail networks to reach consumers complicates the pricing equation. To deal with the problem, India's Nirodh program gives a 25% margin to distributors/wholesalers, compared to 6% offered on most other goods. Retailers also receive a 25% margin, more than double the commercial rate. Once prices are set, increases pose hazards. Local government approval often is a prerequisite and can require lengthy negotiations. Market studies remain a valuable approach to effective pricing, according to PNA's Mallamad and other research consultants. They cite such effective research strategies as test marketing products and asking consumers how prices affect buying habits. Further, CSM projects can jump over some pricing hurdles through creative marketing. An effective pricing strategy alone cannot produce a successful CSM program. Pricing
Pengaruh Debt to Equty Ratio, Current Ratio , Net Profit Margin Terhadap Harga Saham dengan Price Earning Ratio Sebagai Variabel Pemoderasi pada Perusahaan Manufaktur yang Terdaftar di BEI Periode 2012-2014

OpenAIRE

Theresia, Paskah Lia

2017-01-01

This study conducted to analyze the effect of variable Debt to Equity Ratio (DER), Current Ratio (CR), Net Profit Margin (NPM) andPrice Earnings Ratio (PER) to the Stock Prices with Price Earnings Ratio (PER) as an moderating variable on companies listed on Indonesian Stock Exchange from 2012 - 2014.The samplingtechnique used is purposive sampling and number of samples used by 23 companies. The analysis technique used are Descriptive Statistic Analysis, Classical Assumption Test, Hypothesis T...
Prices and heterogeneous search costs

NARCIS (Netherlands)

Luis Moraga-Gonzalez, Jose; Sandor, Zsolt; Wildenbeest, Matthijs R.

2017-01-01

We study price formation in a model of consumer search for differentiated products in which consumers have heterogeneous search costs. We provide conditions under which a pure-strategy symmetric Nash equilibrium exists and is unique. Search costs affect two margins-the intensive search margin (or
Globalization and the price decline of illicit drugs.

Science.gov (United States)

Costa Storti, Cláudia; De Grauwe, Paul

2009-01-01

This study aims at understanding the mechanisms underlying the dramatic decline of the retail prices of major drugs like cocaine and heroin during the past two decades. It also aims at analysing the implications of this decline for drug policies. We use a theoretical model to identify the possible causes of this price decline. This allows us to formulate the hypothesis that the major driving force behind the price decline is a reduction of the intermediation margin (the difference between the retail and producer prices). We also develop the hypothesis that globalization has been an important factor behind the decline of the intermediation margin. We then analyse the statistical information to test these hypotheses. We find that the decline in the retail prices of drugs is related to the strong decline in the intermediation margin in the drug business, and that globalization is the main driving force behind this phenomenon. Globalization has done so by increasing the efficiency of the distribution of drugs, by reducing the risk premium involved in dealing with drugs, and by increasing the degree of competition in the drug markets. We conclude that the cocaine and heroin price declines were due to a sharp fall in the intermediation margin, which was probably influenced by globalization. This phenomenon might have a strong impact on the effectiveness of drug policies, increasing the relative effectiveness of policies aiming at reducing the demand of drugs.
Endogeneous price leadership in a duopoly: equal products, unequal technology

NARCIS (Netherlands)

Dastidar, K.G.; Furth, D.

2005-01-01

In the present paper we study endogenous price leadership in the context of a homogeneous product Bertrand duopoly model in which the firms have different, strictly convex cost functions. In such a framework it is well known that a simultaneous move price choice game does not have an equilibrium in
Learning monopolies with delayed feedback on price expectations

Science.gov (United States)

Matsumoto, Akio; Szidarovszky, Ferenc

2015-11-01

We call the intercept of the price function with the vertical axis the maximum price and the slope of the price function the marginal price. In this paper it is assumed that a monopolistic firm has full information about the marginal price and its own cost function but is uncertain on the maximum price. However, by repeated interaction with the market, the obtained price observations give a basis for an adaptive learning process of the maximum price. It is also assumed that the price observations have fixed delays, so the learning process can be described by a delayed differential equation. In the cases of one or two delays, the asymptotic behavior of the resulting dynamic process is examined, stability conditions are derived. Three main results are demonstrated in the two delay learning processes. First, it is possible to stabilize the equilibrium which is unstable in the one delay model. Second, complex dynamics involving chaos, which is impossible in the one delay model, can emerge. Third, alternations of stability and instability (i.e., stability switches) occur repeatedly.
Alternative pricing methodologies

International Nuclear Information System (INIS)

Anon.

1991-01-01

With the increased interest in competitive market forces and growing recognition of the deficiencies in current practices, FERC and others are exploring alternatives to embedded cost pricing. A number of these alternatives are discussed in this chapter. Marketplace pricing, discussed briefly here, is the subject of the next chapter. Obviously, the pricing formula may combine several of these methodologies. One utility of which the authors are aware is seeking a price equal to the sum of embedded costs, opportunity costs, line losses, value of service, FERC's percentage adder formula and a contract service charge
Electricity market pricing, risk hedging and modeling

Science.gov (United States)

Cheng, Xu

In this dissertation, we investigate the pricing, price risk hedging/arbitrage, and simplified system modeling for a centralized LMP-based electricity market. In an LMP-based market model, the full AC power flow model and the DC power flow model are most widely used to represent the transmission system. We investigate the differences of dispatching results, congestion pattern, and LMPs for the two power flow models. An appropriate LMP decomposition scheme to quantify the marginal costs of the congestion and real power losses is critical for the implementation of financial risk hedging markets. However, the traditional LMP decomposition heavily depends on the slack bus selection. In this dissertation we propose a slack-independent scheme to break LMP down into energy, congestion, and marginal loss components by analyzing the actual marginal cost of each bus at the optimal solution point. The physical and economic meanings of the marginal effect at each bus provide accurate price information for both congestion and losses, and thus the slack-dependency of the traditional scheme is eliminated. With electricity priced at the margin instead of the average value, the market operator typically collects more revenue from power sellers than that paid to power buyers. According to the LMP decomposition results, the revenue surplus is then divided into two parts: congestion charge surplus and marginal loss revenue surplus. We apply the LMP decomposition results to the financial tools, such as financial transmission right (FTR) and loss hedging right (LHR), which have been introduced to hedge against price risks associated to congestion and losses, to construct a full price risk hedging portfolio. The two-settlement market structure and the introduction of financial tools inevitably create market manipulation opportunities. We investigate several possible market manipulation behaviors by virtual bidding and propose a market monitor approach to identify and quantify such
Transmission pricing: paradigms and methodologies

Energy Technology Data Exchange (ETDEWEB)

Shirmohammadi, Dariush [Pacific Gas and Electric Co., San Francisco, CA (United States); Vieira Filho, Xisto; Gorenstin, Boris [Centro de Pesquisas de Energia Eletrica (CEPEL), Rio de Janeiro, RJ (Brazil); Pereira, Mario V.P. [Power System Research, Rio de Janeiro, RJ (Brazil)

1994-12-31

In this paper we describe the principles of several paradigms and methodologies for pricing transmission services. The paper outlines some of the main characteristics of these paradigms and methodologies such as where they may be used for best results. Due to their popularity, power flow based MW-mile and short run marginal cost pricing methodologies will be covered in some detail. We conclude the paper with examples of the application of these two pricing methodologies for pricing transmission services in Brazil. (author) 25 refs., 2 tabs.
Determination of the Factors That Affect House Prices in Turkey by Using Hedonic Pricing Model

OpenAIRE

Kaya, Aslı; Atan, Murat

2014-01-01

The primary purpose of this paper is to analyze the marginal effects of various features of the houses on the prices to observe the price changes in the Turkish housing market which follows a heterogeneous pattern. As the second concern, it is aimed to declare the results and additionally to define Turkish housing market and its submarkets which affect the market itself and to calculate the pure price changes of the houses with constant features. Hedonic pricing model is applied on the data o...
Retail margins and the effects of an integrated Nordic end user market for electricity

Energy Technology Data Exchange (ETDEWEB)

Damsgaard, Niclas; Roempoetti, Marie

2007-09-15

There is an ongoing discussion about the need for further and deeper integration of the Nordic electricity market. Following the Nordic Council of Minister's summit in Akureyri in 2004 this work has been intensified. NordREG and Nordel have produced several studies on the integration of the market. Work is currently being done on a Nordic common market platform for balancing services and a Nordic balancing agreement, the market design for a common market and a common model for supply switches and several other issues. This study should be seen in relationship with these other studies and we have deliberately aimed at avoiding overlaps. An integrated Nordic retail market for electricity would in principle imply a common market for 14 million customers served by several hundred retail companies. The question asked in this study is what are the benefits for the customers of such a development? In order to create a common Nordic market there are several barriers that needs to be overcome. There are technical barriers such as differences in IT-systems, regulatory barriers caused by differences in e.g. the responsibilities and the regulation of the DSOs and finally of course business barriers that exists for all cross-border businesses. A well-functioning Nordic retail market would lead to price equalisation - at least if the costs are equal. This would mean that particularly customers in areas with high retail margins could benefit from a joint Nordic market. Furthermore, dilution of market power could lead to more intense competition which in turn both could lead to lower costs and lower margins. In this report we focus on the possible direct effects on prices. In addition to this it is likely that there are efficiency gains, for instance through decreased costs in developing IT-systems etc. for a larger market which would decrease costs both for the suppliers and for DSOs. There might also be other economies-of-scales arising from a larger market. The possible
Economic analysis of the water demand in the hotels and restaurants sector: Shadow prices and elasticities

Science.gov (United States)

Angulo, Ana; Atwi, Majed; Barberán, Ramón; Mur, Jesús

2014-08-01

Despite the growing economic importance of tourism, and its impact on relative water shortage, little is known about the role that water plays in the productive process of hotels and restaurants and, therefore, the possible implications of water demand management policy for this sector. This study aims to fill this gap. It is based on the microdata of 676 firms in the sector, operating in the city of Zaragoza (Spain) for a 12 year period. Based on the Translog cost function, we estimate the shadow price of water in the short run and, from a long-run perspective, its direct price elasticity, its cross elasticities relative to labor, capital, and supplies, and its elasticity with respect to the level of output. The results obtained show that water provides sector firms returns that are on average higher than its price, although in the case of hotels the margin is really narrow. This situation provides policy makers with a margin for applying price increases without affecting the sector's viability, with some caution in the case of hotels. Water demand elasticity equals -0.38 in the case of hotels, but it is not significant in the case of restaurants and bar-cafes; hence, only in hotels is there potential for influencing water use patterns, encouraging the resource's conservation through pricing policy. Moreover, capital is a substitutive factor of water, and the elasticity of water with respect to output is 0.40, all of which should also be considered by policy makers in water resource management.
The determinants of oil prices

International Nuclear Information System (INIS)

Angelier, J-P.

1991-01-01

In recent years, swings in oil prices have been of unprecendented severity and frequency. Three factors work together to determine the price of oil: in the short term, the balance between supply and demand; in the medium term, the structure of the oil industry; and in the long term, the marginal production cost consistent with world oil demand. An oil price forecast is presented based on these considerations, and it is predicted that in the year 2000, oil prices will not be significantly different from those of today. 28 refs
33 CFR 211.75 - Price.

Science.gov (United States)

2010-07-01

... 33 Navigation and Navigable Waters 3 2010-07-01 2010-07-01 false Price. 211.75 Section 211.75... Under Jurisdiction of Department of the Army for Cottage Site Development and Use § 211.75 Price. The... for a price equal to the fair market value of the site at the time of the sale. ...
Value of time: Speeding behavior and gasoline prices

OpenAIRE

Wolff, Hendrik

2012-01-01

Do drivers reduce speeds when gasoline prices are high? Previous research investigating this energy conservation hypothesis produced mixed results. We take a fresh look at the data and estimate a significant negative relationship between speeding and gasoline prices. This presents a new methodology of deriving the 'Value of Time' (VOT) based on the intensive margin (previous VOT studies compare across the extensive margin) which has important advantages to circumvent potential omitted variabl...
The intertemporal stability of the concentration-margins relationship in Dutch and U.S. manufacturing

NARCIS (Netherlands)

Y.M. Prince (Yvonne); A.R. Thurik (Roy)

1994-01-01

textabstractFactors influencing price-cost margins are investigated using a rich panel data base of the Dutch manufacturing sector. Attention is devoted to the intertemporal stability of the relationship explaining price-cost margins and to a comparison with U.S. results. Our results indicate that
Nonlinear Pricing to Produce Information

OpenAIRE

David J. Braden; Shmuel S. Oren

1994-01-01

We investigate the firm's dynamic nonlinear pricing problem when facing consumers whose tastes vary according to a scalar index. We relax the standard assumption that the firm knows the distribution of this index. In general the firm should determine its marginal price schedule as if it were myopic, and produce information by lowering the price schedule; “bunching” consumers at positive purchase levels should be avoided. As a special case we also consider a market characterized by homogeneous...
Electricity prices in France. From reality to perspectives in competition

International Nuclear Information System (INIS)

Leban, R.

1999-01-01

The French system of electricity pricing is based upon the principle of 'sale at development cost' or 'marginal long-term cost'. Drawing up prices is based upon a calculation of the marginal production costs carried out from time to time on the margins of the network for the years to come in accordance with demand forecasts and based upon a statistical but detailed appreciation of marginal transport costs. Gradually refined in order to take account of changes in demand and increases in the capacity of clients to respond to price signals, the system today appears to be highly complex. On the other hand this system possesses unequaled properties to encourage clients to consume wisely and boasts a recognised theoretical force. The long-term failure of the network to adapt may lead to an increasing focus on marginal short-term real costs, with as consequence the drastic reduction of seasonal variations. The difference with development cost pricing is fairly imperceptible in fine if, in order for a stable signal to exist, the short-term costs are averaged over future years. The continued existence of non-eligible customer segments and the existence (at least for several years) of dominant positions in those open to competition mean that there is a risk of cross-subsidies and predatory pricing being employed, risk that the regulator must restrict. The idea of avoiding cross-subsidies by imposing prices at marginal development costs as the ceiling for the prices charged to non-eligible clients, the use of the marginal short-term real costs of the operator to define the variable costs below which there is a predatory situation, and the use of the above mentioned marginal development costs to specify the total supply costs above which a predatory situation is no longer applicable appears tempting for three reasons. These costs always make sense on a legal and economic level, they may be determined easily due to the pricing decisions agreed with the EDF and the mechanisms
Effect of Margin Designs on the Marginal Adaptation of Zirconia Copings.

Science.gov (United States)

Habib, Syed Rashid; Al Ajmi, Mohammed Ginan; Al Dhafyan, Mohammed; Jomah, Abdulrehman; Abualsaud, Haytham; Almashali, Mazen

2017-09-01

The aim of this in vitro study was to investigate the effect of Shoulder versus Chamfer margin design on the marginal adaptation of zirconia (Zr) copings. 40 extracted molar teeth were mounted in resin and prepared for zirconia crowns with two margin preparation designs (20=Shoulder and 20=Chamfer). The copings were manufactured by Cercon® (DeguDent GmbH, Germany) using the CAD/CAM system for each tooth. They were tried on each tooth, cemented, thermocycled, re-embedded in resin and were subsequently cross sectioned centrally into two equal mesial and distal halves. They were examined under electron microscope at 200 X magnification and the measurements were recorded at 5 predetermined points in micrometers (µm). The o verall mean marginal gap for the two groups was found to be 206.98+42.78µm with Shoulder margin design (Marginal Gap=199.50+40.72µm) having better adaptation compared to Chamfer (Marginal Gap=214.46+44.85µm). The independent-samples t-test showed a statistically non-significant difference (p=.113) between the means of marginal gap for Shoulder and Chamfer margin designs and the measurements were recorded at 5 predetermined points for the two groups. The Chamfer margin design appeared to offer the same adaptation results as the Shoulder margin design.

Resale Price Maintenance and Manufacturer Competition for Exclusive Dealerships.

OpenAIRE

Perry, Martin K; Besanko, David

1991-01-01

Two manufacturers distribute their brands through exclusive retail dealers and must compete for consumers indirectly by inducing retailers to carry their brands. The authors compare equilibrium outcomes with and without resale price maintenance. Maximum resale price maintenance lowers the retail price if manufacturers cannot employ franchise fees. Minimum retail price maintenance raises the retail price if manufacturers cannot set a wholesale price above marginal cost and must employ only a f...
Energy prices in the presence of plant indivisibilities

International Nuclear Information System (INIS)

Fischer, Ronald; Serra, Pablo

2003-01-01

In several countries (Chile, Bolivia, Argentina and Peru, among others), power plants are dispatched according to merit order, i.e. based on the marginal operating costs of the plants. In this scheme, the operating plant with the highest marginal cost sets the spot price at which firms trade the energy required to fulfill their contracts. The underlying peak-load pricing model assumes that plants can operate at any level up to capacity, whereas real power plants have minimum operating levels. This implies that a low cost plant might have to reduce its supply in order to accommodate the minimum operating level of a more expensive power plant. This paper derives the welfare maximizing price rules in this case and shows that the standard peak-load pricing rules no longer apply
Airport Pricing Strategies

Science.gov (United States)

Pels, Eric; Verhoef, Erik T.

2003-01-01

Conventional economic wisdom suggests that congestion pricing would be an appropriate response to cope with the growing congestion levels currently experienced at many airports. Several characteristics of aviation markets, however, may make naive congestion prices equal to the value of marginal travel delays a non-optimal response. This paper has developed a model of airport pricing that captures a number of these features. The model in particular reflects that airlines typically have market power and are engaged in oligopolistic competition at different sub-markets; that part of external travel delays that aircraft impose are internal to an operator and hence should not be accounted for in congestion tolls. We presented an analytical treatment for a simple bi-nodal symmetric network, which through the use of 'hyper-networks' would be readily applicable to dynamic problems (in discrete time) such as peak - off-peak differences, and some numerical exercises for the same symmetric network, which was only designed to illustrate the possible comparative static impacts of tolling, in addition to marginal equilibrium conditions as could be derived for the general model specification. Some main conclusions are that second-best optimal tolls are typically lower than what would be suggested by congestion costs alone and may even be negative, and that the toll as derived by Brueckner (2002) may not lead to an increase in total welfare. While Brueckner (2002) has made clear that congestion tolls on airports may be smaller than expected when congestion costs among aircraft are internal for a firm, our analysis adds to this that a further downward adjustment may be in order due to market power. The presence of market power (which causes prices to exceed marginal costs) may cause the pure congestion toll to be suboptimal, because the resulting decrease in demand is too high (the pure congestion tall does not take into account the decrease in consumer surplus). The various
Price regulation and international resource supply

Energy Technology Data Exchange (ETDEWEB)

Siebert, H

1982-03-01

Price regulation is an instrument between two diverging aims: The demand for low resource prices motivated by the principle of equal distribution in our day, and the desire for economical management of resources as a responsibility we have to future generations. The present publication investigates how price regulation influences intertemporal supply of resources. For the assumed cases constant resource price, constant admissible increase in resource price, expected release of resource price and deregulation of a price held constant for a period of time mathematical models are developmed.
Electricity between monopoly and competition. Selling at the marginal cost. The rational guidance of electric energy consumption by tariffs

International Nuclear Information System (INIS)

Boiteux, Marcel

2015-10-01

Within the perspective of the introduction of competition, the first article comments the issues related to the different professions: distribution (which solutions as multiple grids would be too expensive?), interconnection and transport grids (same questions), and production. The author outlines some characteristics of electricity: it cannot be stored, is a rigid product, has a price elasticity almost null on the short term. Then he discusses different problems to be solved: transport tolls, competition for production, difference between customers (big clients, households, handicraft). In the second article, the author discusses the issue of pricing (why selling at cost price or at marginal cost price?) and discusses the definition of this marginal cost. In the third article, the author comments the common use of tariffs by electricity distribution companies as an incentive for a rational use of electric energy by consumers. He describes how prices are factors of economic choice, the implication of selling at cost price and at marginal cost price. He discusses the relationship between marginal cost price and budget balance, and the practical adaptation of tariffs
Calculating the marginal costs of a district-heating utility

International Nuclear Information System (INIS)

Sjoedin, Joergen; Henning, Dag

2004-01-01

District heating plays an important role in the Swedish heat-market. At the same time, the price of district heating varies considerably among different district-heating utilities. A case study is performed here in which a Swedish utility is analysed using three different methods for calculating the marginal costs of heat supply: a manual spreadsheet method, an optimising linear-programming model, and a least-cost dispatch simulation model. Calculated marginal-costs, obtained with the three methods, turn out to be similar. The calculated marginal-costs are also compared to the actual heat tariff in use by the utility. Using prices based on marginal costs should be able to bring about an efficient resource-allocation. It is found that the fixed rate the utility uses today should be replaced by a time-of-use rate, which would give a more accurate signal for customers to change their heat consumptions. (Author)
Essays on pricing dynamics, price dispersion, and nested logit modelling

Science.gov (United States)

Verlinda, Jeremy Alan

The body of this dissertation comprises three standalone essays, presented in three respective chapters. Chapter One explores the possibility that local market power contributes to the asymmetric relationship observed between wholesale costs and retail prices in gasoline markets. I exploit an original data set of weekly gas station prices in Southern California from September 2002 to May 2003, and take advantage of highly detailed station and local market-level characteristics to determine the extent to which spatial differentiation influences price-response asymmetry. I find that brand identity, proximity to rival stations, bundling and advertising, operation type, and local market features and demographics each influence a station's predicted asymmetric relationship between prices and wholesale costs. Chapter Two extends the existing literature on the effect of market structure on price dispersion in airline fares by modeling the effect at the disaggregate ticket level. Whereas past studies rely on aggregate measures of price dispersion such as the Gini coefficient or the standard deviation of fares, this paper estimates the entire empirical distribution of airline fares and documents how the shape of the distribution is determined by market structure. Specifically, I find that monopoly markets favor a wider distribution of fares with more mass in the tails while duopoly and competitive markets exhibit a tighter fare distribution. These findings indicate that the dispersion of airline fares may result from the efforts of airlines to practice second-degree price discrimination. Chapter Three adopts a Bayesian approach to the problem of tree structure specification in nested logit modelling, which requires a heavy computational burden in calculating marginal likelihoods. I compare two different techniques for estimating marginal likelihoods: (1) the Laplace approximation, and (2) reversible jump MCMC. I apply the techniques to both a simulated and a travel mode
Time is up: increasing shadow price of time in primary-care office visits.

Science.gov (United States)

Tai-Seale, Ming; McGuire, Thomas

2012-04-01

A physician's own time is a scarce resource in primary care, and the physician must constantly evaluate the gain from spending more time with the current patient against moving to address the health-care needs of the next. We formulate and test two alternative hypotheses. The first hypothesis is based on the premise that with time so scarce, physicians equalize the marginal value of time across patients. The second, alternative hypothesis states that physicians allocate the same time to each patient, regardless of how much the patient benefits from the time at the margin. For our empirical work, we examine the presence of a sharply increasing subjective shadow price of time around the 'target' time using video recordings of 385 visits by elderly patients to their primary care physician. We structure the data at the 'topic' level and find evidence consistent with the alternative hypothesis. Specifically, time elapsed within a visit is a very strong determinant of the current topic being the 'last topic'. This finding implies the physician's shadow price of time is rising during the course of a visit. We consider whether dislodging a target-time mentality from physicians (and patients) might contribute to more productive primary care practice. Copyright © 2011 John Wiley & Sons, Ltd.
Price Leadership and Unequal Market Sharing

OpenAIRE

Dijkstra, Peter T.

2014-01-01

We consider experimental markets of repeated homogeneous price-setting duopolies. We investigate the effect on collusion of sequential versus simultaneous price setting. We also examine the effect on collusion of changes in the size of each subject's market share in case both subjects set the same price. Our results show that sequential price setting compared with simultaneous price setting facilitates collusion, if subjects have equal market shares or if the follower has the larger market sh...
Immigration and Swiss House Prices

OpenAIRE

Kathrin Degen; Andreas M. Fischer

2010-01-01

This study examines the behavior of Swiss house prices to immigration flows for 85 districts from 2001 to 2006. The results show that the nexus between immigration and house prices holds even in an environment of low house price inflation, nationwide rent control, and modest immigration flows. An immigration inflow equal to 1% of an area's population is coincident with an increase in prices for single-family homes of about 2.7%: a result consistent with previous studies. The overall immigrati...
Dynamic pricing and inventory control with delivery flexibility

DEFF Research Database (Denmark)

Chen, Wen; He, Ying

2018-01-01

We study a multi-period inventory system with price-sensitive demand and uncertain supplier, focusing on the advantage of delivery flexibility. The optimal pricing and inventory replenishment decisions are explored. We also investigate the changes of marginal profit, optimal order quantities...
Rent dissipation through electricity prices of publicly owned utilities

International Nuclear Information System (INIS)

Bernard, J-T.; Roland, M.

1997-01-01

Pricing policies of Canadian public utilities were examined. It was shown that under the existing set of rules the prices established are frequently below the marginal cost. This appears to be particularly true in the case of provinces that rely principally on hydroelectric resources. Study recommendations to bring electricity prices in line with marginal costs have had little success to date despite overwhelming evidence of large economic losses associated with the current institutional arrangements. This situation remains at the same time that governments apply high tax rates on incomes. By putting together two strands of economic literature, public choice and the theory of public utility pricing, this paper develops a simple model that explains why the median consumer prefers a low electricity price and a high tax rate. Hydro-Quebec survey data is used to confirm that these conditions are satisfied in Quebec. 17 refs., 1 tab
HEDONIC VALUATION OF MARGINAL WILLINGNESS TO PAY FOR AIR QUALITY IMPROVEMENT

Directory of Open Access Journals (Sweden)

Endah Saptutyningsih

2014-10-01

Full Text Available AbstractThis study aims to identify the highest air pollution areas and to estimate household marginal willingness to pay for air quality improvement. The result of Kriging technique indicates that six sub districts in Yogyakarta City and one sub district in Gunungkidul have highest concentration of particle pollution (PM10. The result of hedonic price method conclude that by adopting a two-stage estimation procedure an 1% increase in the level of PM10 reduced property prices in the study area by 0.32%. Marginal implicit price for reducing PM10 is Rp 957,900.00. The households are willing to pay an additional amount of 1.34 percent for a reduction in PM10 by 1%.Keywords: Air pollution, marginal willingness to pay, hedonic price, implicit priceJEL classification numbers: D12, Q53AbstrakPenelitian ini bertujuan mengidentifikasi daerah polusi udara tertinggi dan untuk memperkirakan kesediaan marginal rumah tangga untuk membayar untuk perbaikan kualitas udara. Dengan menggunakan teknik Kriging, hasil penelitian menunjukkan bahwa enam kecamatan di Kota Yogyakarta dan satu kecamatan di Gunungkidul memiliki konsentrasi tertinggi partikel polusi (PM10. Sementara itu, dengan metode harga hedonik yang mengadopsi prosedur dua tahap, paper ini menyimpulkan bahwa setiap peningkatan PM10 sebesar 1% akan menurunkan harga properti di daerah penelitian sebesar 0.32 persen. Harga implisit marjinal untuk mengurangi PM10 adalah Rp 957,900. Rumah tangga bersedia membayar tambahan 1,34 persen untuk pengurangan PM10 sebesar 1%.Kata kunci: Polusi udara, keinginan membayar marjinal, harga hedonik, SIG, harga implisitJEL classification numbers: D12, Q53
Aspects of marginal expenditures in energy sector

International Nuclear Information System (INIS)

Stojchev, D.; Kynev, K.

1994-01-01

Technical and economical problems of marginal analysis methodology, its application procedure in energy sector and marginal expenditures determination are outlined. A comparative characteristics of the application is made for different periods of time. The differences in calculation of the marginal expenditures and prices are discussed. The operational costs, investments and inflation are analyzed. The mechanism of application of this approach in different planing horizon is outlined. The role of the change in the costs in time, the time unit, volume, the scope of application, etc. are determined. The areas of transition from one to other form of marginal expenditures are shown. 4 refs. (orig.)
Exploration can cause falling non-renewable resource prices

International Nuclear Information System (INIS)

Boyce, John R.

2003-01-01

This note shows that when marginal exploration costs are increasing in the rate of exploration that it is possible to observe non-renewable resource prices falling over a portion of the extraction profile. Thus, while the model of Pindyck (J. Polit. Econ. 86 (1978) 841) was based on an incorrect specification of the aggregate extraction cost function, its general conclusion that exploration can cause falling non-renewable resource prices is upheld. This result is in contrast to Mendelsohn and Swierzbinski (Int. Econ. Rev. 30 (1989) 175), who assumed that marginal extraction costs were constant
An Analysis of Price Determination and Markups in the Air-Conditioning and Heating Equipment Industry

Energy Technology Data Exchange (ETDEWEB)

Dale, Larry; Millstein, Dev; Coughlin, Katie; Van Buskirk, Robert; Rosenquist, Gregory; Lekov, Alex; Bhuyan, Sanjib

2004-01-30

In this report we calculate the change in final consumer prices due to minimum efficiency standards, focusing on a standard economic model of the air-conditioning and heating equipment (ACHE) wholesale industry. The model examines the relationship between the marginal cost to distribute and sell equipment and the final consumer price in this industry. The model predicts that the impact of a standard on the final consumer price is conditioned by its impact on marginal distribution costs. For example, if a standard raises the marginal cost to distribute and sell equipment a small amount, the model predicts that the standard will raise the final consumer price a small amount as well. Statistical analysis suggest that standards do not increase the amount of labor needed to distribute equipment the same employees needed to sell lower efficiency equipment can sell high efficiency equipment. Labor is a large component of the total marginal cost to distribute and sell air-conditioning and heating equipment. We infer from this that standards have a relatively small impact on ACHE marginal distribution and sale costs. Thus, our model predicts that a standard will have a relatively small impact on final ACHE consumer prices. Our statistical analysis of U.S. Census Bureau wholesale revenue tends to confirm this model prediction. Generalizing, we find that the ratio of manufacturer price to final consumer price prior to a standard tends to exceed the ratio of the change in manufacturer price to the change in final consumer price resulting from a standard. The appendix expands our analysis through a typical distribution chain for commercial and residential air-conditioning and heating equipment.
Electricity Futures Prices : Time Varying Sensitivity to Fundamentals

NARCIS (Netherlands)

S-E. Fleten (Stein-Erik); R. Huisman (Ronald); M. Kilic (Mehtap); H.P.G. Pennings (Enrico); S. Westgaard (Sjur)

2014-01-01

textabstractThis paper provides insight in the time-varying relation between electricity futures prices and fundamentals in the form of prices of contracts for fossil fuels. As supply curves are not constant and different producers have different marginal costs of production, we argue that the
FTR-option formulation and pricing

International Nuclear Information System (INIS)

Parmeshwaran, Vijay; Muthuraman, Kumar

2009-01-01

Recent changes in electricity markets have advocated the use of Local Marginal Prices (LMP) for congestion management and pricing. From the perspective of market participants, the LMPs pose a risk since they are not known before a transaction on the grid is made. Financial transmission rights (FTR) are instruments that help market participants hedge this risk and are issuable in two flavors - obligations and options. While pricing obligations are much easier, pricing FTR options pose a significant challenge. In this paper we develop a computational method for pricing FTR options. We also discuss the problem of designing financial instrument sets that assure revenue adequacy for the issuer. We point out the difficulty in assuring revenue adequacy when FTR options are present and propose a scheme for overcoming the difficulty. The proposed pricing method can be used to compute prices of options and obligations in the primary market or as a reliable pricing tool to compute option prices in the secondary market. Finally using a test network we present and discuss numerical results. (author)
Electricity transmission pricing: Tracing based point-of-connection tariff

International Nuclear Information System (INIS)

Abhyankar, A.R.; Khaparde, S.A.

2009-01-01

Point-of-connection (POC) scheme of transmission pricing in decentralized markets charges the participants a single rate per MW depending on their point-of-connection. Use of grossly aggregated postage stamp rates as POC charges fails to provide appropriate price signals. The POC tariff based on distribution of network sunk costs by employing conventional tracing assures recovery of sunk costs based on extent of use of network by participants. However, the POC tariff by this method does not accommodate economically efficient price signals which correspond to marginal costs. On the other hand, the POC tariff, if made proportional to marginal costs alone, fails to account for sunk costs and extent of use of network. This paper overcomes these lacunae by combining the above stated desired objectives under the recently proposed optimal tracing framework. Since real power tracing problem is amenable to multiple solutions, it is formulated as linearly constrained optimization problem. By employing this methodology, consideration of extent of network use and sunk cost recovery are guaranteed, while objective function is designed such that the spatial pattern of price signals closely follows the pattern of scaled locational marginal prices. The methodology is tested on IEEE 30 bus system, wherein average power flow pattern is established by running various simulation states on congested and un-congested network conditions. (author)
Electricity: French industrialists tied up by prices

International Nuclear Information System (INIS)

Jemain, A.

2004-01-01

With more than 50% of increase in 3 years, the electricity prices reach summits in France. The industrialists, initially enthusiastic over the promises of the liberalization of European energy markets, are today particularly disappointed and denounce an irrational logic. The reasons of these inflationary prices are explained in this article: alignment of electricity prices with respect to the prices of the less efficient producers (oil and gas power plants), lack of peak production means which induces prices volatility, a commodity market model unsuitable to electricity specificities, lack of transparency in the establishment of reference prices, no margins for negotiation, and will of Electricite de France (EdF) to restore its financial status. (J.S.)

A Distribution-class Locational Marginal Price (DLMP) Index for Enhanced Distribution Systems

Science.gov (United States)

Akinbode, Oluwaseyi Wemimo

The smart grid initiative is the impetus behind changes that are expected to culminate into an enhanced distribution system with the communication and control infrastructure to support advanced distribution system applications and resources such as distributed generation, energy storage systems, and price responsive loads. This research proposes a distribution-class analog of the transmission LMP (DLMP) as an enabler of the advanced applications of the enhanced distribution system. The DLMP is envisioned as a control signal that can incentivize distribution system resources to behave optimally in a manner that benefits economic efficiency and system reliability and that can optimally couple the transmission and the distribution systems. The DLMP is calculated from a two-stage optimization problem; a transmission system OPF and a distribution system OPF. An iterative framework that ensures accurate representation of the distribution system's price sensitive resources for the transmission system problem and vice versa is developed and its convergence problem is discussed. As part of the DLMP calculation framework, a DCOPF formulation that endogenously captures the effect of real power losses is discussed. The formulation uses piecewise linear functions to approximate losses. This thesis explores, with theoretical proofs, the breakdown of the loss approximation technique when non-positive DLMPs/LMPs occur and discusses a mixed integer linear programming formulation that corrects the breakdown. The DLMP is numerically illustrated in traditional and enhanced distribution systems and its superiority to contemporary pricing mechanisms is demonstrated using price responsive loads. Results show that the impact of the inaccuracy of contemporary pricing schemes becomes significant as flexible resources increase. At high elasticity, aggregate load consumption deviated from the optimal consumption by up to about 45 percent when using a flat or time-of-use rate. Individual load
Prediction future asset price which is non-concordant with the historical distribution

Science.gov (United States)

Seong, Ng Yew; Hin, Pooi Ah

2015-12-01

This paper attempts to predict the major characteristics of the future asset price which is non-concordant with the distribution estimated from the price today and the prices on a large number of previous days. The three major characteristics of the i-th non-concordant asset price are the length of the interval between the occurrence time of the previous non-concordant asset price and that of the present non-concordant asset price, the indicator which denotes that the non-concordant price is extremely small or large by its values -1 and 1 respectively, and the degree of non-concordance given by the negative logarithm of the probability of the left tail or right tail of which one of the end points is given by the observed future price. The vector of three major characteristics of the next non-concordant price is modelled to be dependent on the vectors corresponding to the present and l - 1 previous non-concordant prices via a 3-dimensional conditional distribution which is derived from a 3(l + 1)-dimensional power-normal mixture distribution. The marginal distribution for each of the three major characteristics can then be derived from the conditional distribution. The mean of the j-th marginal distribution is an estimate of the value of the j-th characteristics of the next non-concordant price. Meanwhile, the 100(α/2) % and 100(1 - α/2) % points of the j-th marginal distribution can be used to form a prediction interval for the j-th characteristic of the next non-concordant price. The performance measures of the above estimates and prediction intervals indicate that the fitted conditional distribution is satisfactory. Thus the incorporation of the distribution of the characteristics of the next non-concordant price in the model for asset price has a good potential of yielding a more realistic model.
On Storekeepers' Pricing Behavior.

NARCIS (Netherlands)

B. Bode (Ben); J. Koerts (Johan); A.R. Thurik (Roy)

1986-01-01

textabstractThis research note deals with a quantitative analysis of differences in percentage gross margin between individual stores in the retail trade. A number of hypotheses on pricing behavior of storekeepers are tested using Dutch survey data from nine different types of retail stores. We
Gas pricing in Europe. Pt. 1. Wholesale markets

International Nuclear Information System (INIS)

Donath, R.

1996-01-01

The article investigates gas pricing in the European procurement market and the wholesale markets of the most important EU consumer markets. It demonstrates that value-oriented pricing principles override cost-oriented pricing principles. For one thing, and independently of pricing principles, two- or three-part demand price systems or basic price systems are common. For another, the frequently encountered opportunities for the differentiation of prices show that as long as there is merely substitution competition instead of direct competition, gas suppliers have a certain degree of freedom in fixing their prices. By contrast, the introduction of direct competition in Great Britain has reduced suppliers' individual price fixing margins, because short-term supply and demand variations in the now created spot market are decisive for gas pricing. (orig.) [de
Western Canada : changing pricing dynamics

International Nuclear Information System (INIS)

Frank, B.

1998-01-01

Natural gas supply and demand trends in Western Canada are reviewed in a series of overhead viewgraphs. Production versus pipeline capacity, required gas well completions in the WCSB to meet local demand and fill export pipeline capacity to year 2005, NYMEX and AECO price trends during 1995-2000, and the question of what will happen to prices with additional pipeline capacity to the U.S. Midwest were summarized. The best guess is that Midwest prices will need to be high enough to attract marginal supplies from the Gulf, i.e. prices have be around the Henry Hub + five cents/ mmbtu. The new Canadian pipelines, (Northern Border and Alliance) will lower Midwest prices somewhat, but the impact will be modest. Assuming that additional planned pipeline expansion come on-stream, the pressure to expand east of Chicago will be considerable. tabs., figs
Conference Report: The New Discovery of Margins: Theory-Based Excursions in Marginal Social Fields

OpenAIRE

Kirchner, Babette; Lorenzen, Jule-Marie; Striffler, Christine

2014-01-01

At this year's spring conference of the Sociology of Knowledge Section of the German Sociological Association, a diverse range of theoretical concepts and multiple empirical insights into different marginal social fields were presented. As in everyday life, drawing a line between center and margin can be seen as an important challenge that must equally be faced in sociology. The socially constructed borderline appears to be highly variable. Therefore it has to be delineated or fixed somehow. ...
How do urban households in China respond to increasing block pricing in electricity? Evidence from a fuzzy regression discontinuity approach

International Nuclear Information System (INIS)

Zhang, Zibin; Cai, Wenxin; Feng, Xiangzhao

2017-01-01

China is the largest electricity consumption country after it has passed the United States in 2011. Residential electricity consumption in China grew by 381.35% (12.85% per annum) between 2000 and 2013. In order to deal with rapid growth in residential electricity consumption, an increasing block pricing policy was introduced for residential electricity consumers in China on July 1st, 2012. Using difference-in-differences models with a fuzzy regression discontinuity design, we estimate a causal effect of price on electricity consumption for urban households during the introduction of increasing block pricing policy in Guangdong province of China. We find that consumers do not respond to a smaller (approximately 8%) increase in marginal price. However, consumers do respond to a larger increase in marginal price. An approximately 40% increase in marginal price induces an approximately 35% decrease in electricity use (284 kW h per month). Our results suggest that although the increasing block pricing could affect the behavior of households with higher electricity use, there is only a limit potential to overall energy conservation. - Highlights: • Estimate electricity consumption changes in response to the IBP in China. • Employ quasi-experimental approach and micro household level data in China. • Households do not respond to a smaller increase in marginal price. • 40% increase in marginal price induces a 35% decrease in electricity use.
Price and Income Elasticity of Australian Retail Finance: An Autoregressive Distributed Lag (ARDL Approach

Directory of Open Access Journals (Sweden)

Helen Higgs

2014-03-01

Full Text Available This paper models the price and income elasticity of retail finance in Australia using aggregate quarterly data and an autoregressive distributed lag (ARDL approach. We particularly focus on the impact of the global financial crisis (GFC from 2007 onwards on retail finance demand and analyse four submarkets (period analysed in brackets: owneroccupied housing loans (Sep 1985–June 2010, term loans (for motor vehicles, household goods and debt consolidation, etc. (Dec 1988–Jun 2010, credit card loans (Mar 1990–Jun 2010, and margin loans (Sep 2000–Jun 2010. Other than the indicator lending rates and annual full-time earnings respectively used as proxies for the price and income effects, we specify a large number of other variables as demand factors, particularly reflecting the value of the asset for which retail finance demand is derived. These variously include the yield on indexed bonds as a proxy for inflation expectations, median housing prices, consumer sentiment indices as measures of consumer confidence, motor vehicle and retail trade sales, housing debt-to-housing assets as a measure of leverage, the proportion of protected margin lending, the available credit limit on credit cards, and the All Ordinaries Index. In the long run, we find significant price elasticities only for term loans and margin loans, and significant income elasticities of demand for housing loans, term loans and margin loans. We also find that the GFC only significantly affected the longrun demand for term loans and margin loans. In the short run, we find that the GFC has had a significant effect on the price elasticity of demand for term loans and margin loans. Expected inflation is also a key factor affecting retail finance demand. Overall, most of the submarkets in the analysis indicate that retail finance demand is certainly price inelastic but more income elastic than conventionally thought.
Electricity transmission pricing. How contracts must reflect costs

International Nuclear Information System (INIS)

Shuttleworth, G.

1996-01-01

Two basic structures of transmission systems are distinguished: transmission channels offered through an integrated electric utility and open access offered over an independent network. The first structure allows the application of 'top-down pricing', where transmission prices are derived from customer tariffs less avoidable generation costs. Transmission prices in the second structure must be derived from a 'bottom-up' analysis of transmission costs, including building capacity, marginal losses, and congestion. 5 refs
Effective Drinking Water Pricing, A Case Study of Arak City

Directory of Open Access Journals (Sweden)

Seyyedhosein Sajjadifar

2017-03-01

Full Text Available Drinking water pricing is a major challenge facing the water and wastewater industry in Iran where decisions of water pricing are essentially based on social, legal, administrative, and financial criteria with only a slight heed, if any, paid to economic considerations. Generally speaking, the price of water in Iran reflects a percentage fraction of the costs of water production and distribution while an economterically efficient model of water pricing is absent. This failure to account for economic considerations in water pricing has turned water into a commodity supplied either at a very low price or free of charge in cases. The current situation of water scarcity which is complicated by a multitude of environmental problems can only be ascribed to the present water pricing policies. It is, therefore, essential for the water sector to employ economic tools, adopt relevant approaches, and execute optimized strategic policies in an attempt to reduce the negative impacts of the imminent water crisis. Based on the above considerations, the present study was designed to investigate and review optimal water pricing policies at Arak Water and Wastewater Authority which functions as a business offering both domestic and non-domestic water services. The cost function considered is a translog one and the seemingly unrelated regressions are used for estimation. Results show that the domestic water price levied from customers covers only 33% of the total production and delivery costs such that Arak Water & Wastewater Authority practices the economy of scale in producing both domestic and non-domestic water. Considering the fact that pricing based on the marginal cost under the conditions of economy of scale leads to financial losses for Arak W&W Authority, it seems appropriate to calculate the second best price as suggested by Frank Ramsey. Thus, the marginal cost was combined with the price elasticity for the domestic water demand in the different
Marginal and Interaction Effects in Ordered Response Models

OpenAIRE

Debdulal Mallick

2009-01-01

In discrete choice models the marginal effect of a variable of interest that is interacted with another variable differs from the marginal effect of a variable that is not interacted with any variable. The magnitude of the interaction effect is also not equal to the marginal effect of the interaction term. I present consistent estimators of both marginal and interaction effects in ordered response models. This procedure is general and can easily be extended to other discrete choice models. I ...
The volatility of stock market prices.

Science.gov (United States)

Shiller, R J

1987-01-02

If the volatility of stock market prices is to be understood in terms of the efficient markets hypothesis, then there should be evidence that true investment value changes through time sufficiently to justify the price changes. Three indicators of change in true investment value of the aggregate stock market in the United States from 1871 to 1986 are considered: changes in dividends, in real interest rates, and in a direct measure of intertemporal marginal rates of substitution. Although there are some ambiguities in interpreting the evidence, dividend changes appear to contribute very little toward justifying the observed historical volatility of stock prices. The other indicators contribute some, but still most of the volatility of stock market prices appears unexplained.
Pricing and Policy Problems in the Northeast Fluid Milk Industry

OpenAIRE

Cotterill, Ronald

2006-01-01

This article documents the need for reform of milk pricing in the Northeast. The New York price gouging law can be recast as a fair share law. This new milk policy "kills two birds with one stone." It corrects regional inequities in raw milk pricing by reforming the pricing of milk at retail by limiting and redistributing excessive retail margins to farmers and consumers. The fair share policy relieves allocative price inefficiency, improves the performance of the federal milk market order po...
The price of natural gas

International Nuclear Information System (INIS)

Bakhtiari, A.M.S.

2001-01-01

Natural gas used to be a relatively cheap primary energy source, always at a discount to crude oil (on a comparative British thermal unit basis). It gradually evolved into a major resource during the 20th century - reaching a 24 per cent share of global primary energy in 1999. In the year 2000, natural gas prices in the USA rose to unheard-of highs of 10/million US dollars Btu, ushering in a new era, with natural gas at a 120 per cent premium to crude oil. This clearly was a watershed for gas, somehow similar to the 1973-74 watershed for oil prices. And similarly, any return to the status quo-ante looks rather improbable, although a number of experts (alongside the International Energy Agency) still believe the 2000 price 'spike' to have been ''only transitory''. The consequences of higher gas prices (at a level equal to crude oil prices on a Btu basis) will be multifaceted and momentous, altering habits and uses in downstream industries and economic sectors, as well as providing added income for major gas-exporters, such as Russia, Canada and Algeria. Another potential consequence of the 2000 watershed might be to propel US standard prices (such as the 'Henry Hub' spot) to international status and gas price-setter, as the 'WTI spot' became an 'international benchmark' for crude oils in the post-1993 era. For the time being, the equality of gas and oil prices has become the new norm; but, in the longer term, a discount of crude oil relative to natural gas might be envisaged, as the latter is a cleaner fuel and emits less carbon dioxide when used. (author)
Corporate equality and equity prices: Doing well while doing good?

OpenAIRE

Fu, Shihe; Shan, Liwei

2009-01-01

Two competing hypotheses, value enhancing and value discounting, state that implementing socially responsible corporate policies can have positive or negative effects on firm value. This paper tests how a specific type of social responsibility–corporate equality–affects firm value. Corporate equality is measured by the corporate equality index (CEI). This index quantifies how companies treat their gay, lesbian, bisexual, and transgender employees, consumers, and investors. Using a sample of C...
Revenue Sufficiency and Reliability in a Zero Marginal Cost Future

Energy Technology Data Exchange (ETDEWEB)

Frew, Bethany A.

2017-04-17

Features of existing wholesale electricity markets, such as administrative pricing rules and policy-based reliability standards, can distort market incentives from allowing generators sufficient opportunities to recover both fixed and variable costs. Moreover, these challenges can be amplified by other factors, including (1) inelastic demand resulting from a lack of price signal clarity, (2) low- or near-zero marginal cost generation, particularly arising from low natural gas fuel prices and variable generation (VG), such as wind and solar, and (3) the variability and uncertainty of this VG. As power systems begin to incorporate higher shares of VG, many questions arise about the suitability of the existing marginal-cost-based price formation, primarily within an energy-only market structure, to ensure the economic viability of resources that might be needed to provide system reliability. This article discusses these questions and provides a summary of completed and ongoing modelling-based work at the National Renewable Energy Laboratory to better understand the impacts of evolving power systems on reliability and revenue sufficiency.
National Brand and Private Label Pricing and Promotional Strategy

OpenAIRE

Volpe, Richard J., III

2010-01-01

In this paper I use a unique and rich data set on prices and promotions from major US supermarkets to examine the nature of National Brand and Private Label interaction. Private labels are priced and promoted competitively with NBs, in a manner suggesting that retails are careful not to lose private label market share during times of national brand promotions. The price margin between the two types of products continues to fall in US supermarkets, and the major determinants of the price diffe...
Prices versus Quantities

DEFF Research Database (Denmark)

Hansen, Lars Gårn; Jensen, Frank

illustrate that this result does not generalise to a search fishery, where marginal costs are allowed to depend on harvest. Hansen et al (2008) study a fishery where non-compliance with regulations is a problem. When the regulator is uncertain about non-compliance (compliance uncertainty), then landing fees......Weitzman (2002) studies the regulation of a fishery characterised by constant marginal harvest costs and shows that price regulation performs better than quantity regulation when the regulator is uncertain about the biological reproduction function (ecological uncertainty). Here, we initially...... are the preferred type of regulation, and Hansen et al (2008) find that this result does generalise to a search fishery where marginal costs depend on harvest. In this paper, we simulate a stochastic stock-recruitment model for the Danish cod fishery in the Kategat capturing both ecological and compliance...
Impacts of Retailers’ Pricing Strategies for Produce Commodities on Farmer Welfare

OpenAIRE

Li, Chenguang; Sexton, Richard J.

2009-01-01

The typical model of retail pricing for produce products assumes retailers set price equal to the farm price plus a certain markup. However, observations from scanner data indicate a large degree of price dispersion in the grocery retailing market. In addition to markup pricing behavior, we document three alternative leading pricing patterns: fixed (constant) pricing, periodic sale, and high-low pricing. Retail price variations under these alternative pricing regimes in general have little co...
On the evaluation of marginal expected shortfall

DEFF Research Database (Denmark)

Caporin, Massimiliano; Santucci de Magistris, Paolo

2012-01-01

In the analysis of systemic risk, Marginal Expected Shortfall may be considered to evaluate the marginal impact of a single stock on the market Expected Shortfall. These quantities are generally computed using log-returns, in particular when there is also a focus on returns conditional distribution....... In this case, the market log-return is only approximately equal to the weighed sum of equities log-returns. We show that the approximation error is large during turbulent market phases, with a subsequent impact on Marginal Expected Shortfall. We then suggest how to improve the evaluation of Marginal Expected...

Constrained Monopoly Pricing with Random Participation

OpenAIRE

Basaluzzo, Gabriel; Miravete, Eugenio J

2007-01-01

We present a flexible model of monopoly nonlinear pricing with endogenous participation decisions of heterogeneous consumers. We make use of the moments that define the few self-selecting tariff options that are commonly used to implement the optimal nonlinear tariff to estimate how demand and cost variables affect the pricing strategies offered by incumbent monopolists in several early U.S. local cellular telephone markets through the different elements of the theoretical model: marginal cos...
Reactive Power Pricing Model Considering the Randomness of Wind Power Output

Science.gov (United States)

Dai, Zhong; Wu, Zhou

2018-01-01

With the increase of wind power capacity integrated into grid, the influence of the randomness of wind power output on the reactive power distribution of grid is gradually highlighted. Meanwhile, the power market reform puts forward higher requirements for reasonable pricing of reactive power service. Based on it, the article combined the optimal power flow model considering wind power randomness with integrated cost allocation method to price reactive power. Meanwhile, considering the advantages and disadvantages of the present cost allocation method and marginal cost pricing, an integrated cost allocation method based on optimal power flow tracing is proposed. The model realized the optimal power flow distribution of reactive power with the minimal integrated cost and wind power integration, under the premise of guaranteeing the balance of reactive power pricing. Finally, through the analysis of multi-scenario calculation examples and the stochastic simulation of wind power outputs, the article compared the results of the model pricing and the marginal cost pricing, which proved that the model is accurate and effective.
Optimality of profit-including prices under ideal planning.

Science.gov (United States)

Samuelson, P A

1973-07-01

Although prices calculated by a constant percentage markup on all costs (nonlabor as well as direct-labor) are usually admitted to be more realistic for a competitive capitalistic model, the view is often expressed that, for optimal planning purposes, the "values" model of Marx's Capital, Volume I, is to be preferred. It is shown here that an optimal-control model that maximizes discounted social utility of consumption per capita and that ultimately approaches a steady state must ultimately have optimal pricing that involves equal rates of steady-state profit in all industries; and such optimal pricing will necessarily deviate from Marx's model of equal rates of surplus value (markups on direct-labor only) in all industries.
К вопросу о возможности синтеза концепции удовлетворяющего поиска и неоклассической доктрины

OpenAIRE

Malakhov, Sergey

2012-01-01

The paper argues that when a consumer searches for a lower price, a satisficing decision procedure equalizes marginal costs of search with its marginal benefit. The consumer can maximize the utility of his consumption-leisure choice with regard to the equality of marginal values of search. Therefore, the satisficing decision procedure results in the optimizing consumer behavior.
Basic economic principles of road pricing: From theory to applications

NARCIS (Netherlands)

Rouwendal, J.; Verhoef, E.T.

2006-01-01

This paper presents, a non-technical introduction to the economic principles relevant for transport pricing design and analysis. We provide the basic rationale behind pricing of externalities, discuss why simple Pigouvian tax rules that equate charges to marginal external costs are not optimal in
Policy interactions, risk and price formation in carbon markets

International Nuclear Information System (INIS)

Blyth, William; Bunn, Derek; Kettunen, Janne; Wilson, Tom

2009-01-01

Carbon pricing is an important mechanism for providing companies with incentives to invest in carbon abatement. Price formation in carbon markets involves a complex interplay between policy targets, dynamic technology costs, and market rules. Carbon pricing may under-deliver investment due to R and D externalities, requiring additional policies which themselves affect market prices. Also, abatement costs depend on the extent of technology deployment due to learning-by-doing. This paper introduces an analytical framework based on marginal abatement cost (MAC) curves with the aim of providing an intuitive understanding of the key dynamics and risk factors in carbon markets. The framework extends the usual static MAC representation of the market to incorporate policy interactions and some technology cost dynamics. The analysis indicates that supporting large-scale deployment of mature abatement technologies suppresses the marginal cost of abatement, sometimes to zero, whilst increasing total abatement costs. However, support for early stage R and D may reduce both total abatement cost and carbon price risk. An important aspect of the analysis is in elevating risk management considerations into energy policy formation, as the results of the stochastic modelling indicate wide distributions for the emergence of carbon prices and public costs around the policy expectations. (author)
Price signals in the power market

International Nuclear Information System (INIS)

2000-01-01

Which price signals should be given to the players in the power market to promote a socio-economic power supply in the short term and the long term? In a model with perfect competition, without problems involving delivery quality, and with free scalable capacity in both transmission and production, price signals that reflect marginal losses and shortage of transmission capacity are all that is needed. Stepwise investments create a need for measures that are specific to the situation. Price signals reflecting delivery reliability are probably too weak today. Market power may create a need for greater transmission capacity, but gives no reason for new price signals. Tariffs that reduce installed capacity weakens delivery quality and increases the probability of market power
The marginal costs of greenhouse gas emissions

International Nuclear Information System (INIS)

Tol, R.S.J.

1999-01-01

Estimates of the marginal costs of greenhouse gas emissions are on important input to the decision how much society would want to spend on greenhouse gas emission reduction. Marginal cost estimates in the literature range between $5 and $25 per ton of carbon. Using similar assumptions, the FUND model finds marginal costs of $9--23/tC, depending on the discount rate. If the aggregation of impacts over countries accounts for inequalities in income distribution or for risk aversion, marginal costs would rise by about a factor of 3. Marginal costs per region are an order of magnitude smaller than global marginal costs. The ratios between the marginal costs of CO 2 and those of CH 4 and N 2 O are roughly equal to the global warming potentials of these gases. The uncertainty about the marginal costs is large and right-skewed. The expected value of the marginal costs lies about 35% above the best guess, the 95-percentile about 250%
A regime-switching copula approach to modeling day-ahead prices in coupled electricity markets

DEFF Research Database (Denmark)

Pircalabu, Anca; Benth, Fred Espen

2017-01-01

significant evidence of tail dependence in all pairs of interconnected areas we consider. As a first application of the proposed model, we consider the pricing of financial transmission rights, and highlight how the choice of marginal distributions and copula impacts prices. As a second application we......The recent price coupling of many European electricity markets has triggered a fundamental change in the interaction of day-ahead prices, challenging additionally the modeling of the joint behavior of prices in interconnected markets. In this paper we propose a regime-switching AR–GARCH copula...... to model pairs of day-ahead electricity prices in coupled European markets. While capturing key stylized facts empirically substantiated in the literature, this model easily allows us to 1) deviate from the assumption of normal margins and 2) include a more detailed description of the dependence between...
Analisis Penentuan Tarif Layanan Bus Kota Berdasarkan Marginal Cost Pricing (Studi Pada Perum Damri Kota Surabaya

Directory of Open Access Journals (Sweden)

Dewi Prastiwi

2013-10-01

Full Text Available The concept of regional autonomy has implications for financing in all sectors, including transport. To be able to provide adequate public transport facilities, one of the opportunities is the mobilization of funds through tariff collection mechanism. Determination of transport rates set out in the local rules based approach Incrementalism and line items. This approach represents a lack of economic and psychological capabilities and suitability of the benefits received by the sacrifices that have been issued. Therefore research is needed to analyze the determination of rates of local regulations bound public services locally. This study aimed to analyze the determination of the city bus rate by Cost Pricing (MCP marginal approach, that was the determination of tariff by considering the social benefits received by customers, so if there were additional rates so consumers should receive additional social benefits. Based MCP, Perum Damri can assign the same rate if the consumer gets the same standard of service, but if there was a decline in the standard of service, then the rates should be differentiated.
A forward look at power prices in Alberta

International Nuclear Information System (INIS)

Reid-Carlson, D.

1999-01-01

The various components of the price of electricity, various rate design methodologies, and factors that influence cost-of-service such as types of generation and fuel, age of the physical plant, size of utility, rate of customer and load growth, funding arrangements, tax status, customer mix, and load profile are examined in an effort to predict the future price of electricity in Alberta. The prediction is that delivered prices will increase across all sectors, albeit at levels less than the increase would be without competition. Alberta pool prices in the longer term will continue to reflect the marginal cost of the last generators dispatched to meet the demand. Convergence between electricity spot prices and natural gas prices is predicted to occur over time
Revenue Sufficiency and Reliability in a Zero Marginal Cost Future: Preprint

Energy Technology Data Exchange (ETDEWEB)

Frew, Bethany A.; Milligan, Michael; Brinkman, Greg; Bloom, Aaron; Clark, Kara; Denholm, Paul

2016-12-01

Features of existing wholesale electricity markets, such as administrative pricing rules and policy-based reliability standards, can distort market incentives from allowing generators sufficient opportunities to recover both fixed and variable costs. Moreover, these challenges can be amplified by other factors, including (1) inelastic demand resulting from a lack of price signal clarity, (2) low- or near-zero marginal cost generation, particularly arising from low natural gas fuel prices and variable generation (VG), such as wind and solar, and (3) the variability and uncertainty of this VG. As power systems begin to incorporate higher shares of VG, many questions arise about the suitability of the existing marginal-cost-based price formation, primarily within an energy-only market structure, to ensure the economic viability of resources that might be needed to provide system reliability. This article discusses these questions and provides a summary of completed and ongoing modelling-based work at the National Renewable Energy Laboratory to better understand the impacts of evolving power systems on reliability and revenue sufficiency.
Conference Report: The New Discovery of Margins: Theory-Based Excursions in Marginal Social Fields

Directory of Open Access Journals (Sweden)

Babette Kirchner

2014-05-01

Full Text Available At this year's spring conference of the Sociology of Knowledge Section of the German Sociological Association, a diverse range of theoretical concepts and multiple empirical insights into different marginal social fields were presented. As in everyday life, drawing a line between center and margin can be seen as an important challenge that must equally be faced in sociology. The socially constructed borderline appears to be highly variable. Therefore it has to be delineated or fixed somehow. The construction of margins is necessary for society in general and smaller social groupings alike to confirm one's own "normal" identity, or one's own membership on the fringes. The different contributions exemplify what was established at the beginning of the conference: Namely that society and its margins are defined differently according to the empirical as well as conceptual focus. URN: http://nbn-resolving.de/urn:nbn:de:0114-fqs1402148
Petroleum products price regulation in Nov Scotia : a six-month review

International Nuclear Information System (INIS)

2007-03-01

Gasoline pricing regulation was introduced in July 2006 in order to achieve the following 3 main objectives: (1) stabilize prices by reducing the frequency of price changes and creating more uniform pricing across the province, (2) maintain industry infrastructure by slowing or halting the decline in the dealer network, particularly in rural areas, by improving viability through regulated margins, and (3) minimize the cost to consumers since higher prices are expected to result from the actions needed to maintain price stability and the higher margins needed to maintain industry infrastructure. This report examined the extent to which these objectives were achieved and contained the findings and recommendations of a review of the first six months of gasoline price regulation in Nova Scotia. The report discussed the rationale for regulation, study objectives, approach, and warning signs. It also discussed gasoline regulation in Nova Scotia including how regulation works and implementing regulation. The Nova Scotia gasoline market was presented with reference to industry structure; pre-regulation competition and pricing; and how regulation may affect structure and competition. Last, the report discussed whether regulation was meeting the objectives and perspectives on regulation. Several recommendations were presented, such as reducing the benchmark price adjustment period from two weeks to one week; removing the price cap on full-serve gasoline; adopting a fixed and transparent formula for forward averaging and applying it at each adjustment; and considering a framework for regulatory review. 12 refs., 15 figs
The role of internal reference prices in consumers' willingness to pay judgments: Thaler's Beer Pricing Task revisited.

Science.gov (United States)

Ranyard, R; Charlton, J P; Williamson, J

2001-02-01

Alternative reference prices, either displayed in the environment (external) or recalled from memory (internal) are known to influence consumer judgments and decisions. In one line of previous research, internal reference prices have been defined in terms of general price expectations. However, Thaler (Marketing Science 4 (1985) 199; Journal of Behavioral Decision Making 12 (1999) 183) defined them as fair prices expected from specific types of seller. Using a Beer Pricing Task, he found that seller context had a substantial effect on willingness to pay, and concluded that this was due to specific internal reference prices evoked by specific contexts. In a think aloud study using the same task (N = 48), we found only a marginal effect of seller context. In a second study using the Beer Pricing Task and seven analogous ones (N = 144), general internal reference prices were estimated by asking people what they normally paid for various commodities. Both general internal reference prices and seller context influenced willingness to pay, although the effect of the latter was again rather small. We conclude that general internal reference prices have a greater impact in these scenarios than specific ones, because of the lower cognitive load involved in their storage and retrieval.
DANIELA-SORINA ALBEANU, Equality of chances and health

Directory of Open Access Journals (Sweden)

EMILIAN M. DOBRESCU

2008-01-01

Full Text Available Equality of chance is a major aim for humanity. Having a dynamic conceptualization, equalizing chances poses problems of acceptance on the part of certain socio-professional categories. Solving aspects like discrimination according to certain criteria, marginalization and social exclusion is the task of the government, agencies and of institutions set in the legislation. This work looks at the way in which the problems related to health interfere with the legislation on the equality of chances between men and women, on the one hand (gender policies, and disabled people on the other hands.
Clarifying and Teaching Bohm-Bawerk's "Marginal Pairs."

Science.gov (United States)

Egger, John B.

1998-01-01

Briefly defines and provides some background on Eugen von Bohm-Bawerk's "marginal pairs" theory of pricing. Asserts that Bohm-Bawerk's theory is a good introduction to the Austrian school of economics and illustrates the differences between this approach and neoclassical economic theory. Includes several graphs and tables of data. (MJP)
Hedonic analysis of ultra-high-temperature-treated milk prices in Italy

NARCIS (Netherlands)

Bimbo, Francesco; Bonanno, Alessandro; Liu, Xuan; Viscecchia, Rosaria

2016-01-01

The Italian market for UHT milk has been growing thanks to both consumers' interest in products with an extended shelf life and to the lower prices of these products compared with refrigerated, pasteurized milk. However, because the lower prices of UHT milk can hinder producers' margins,
News impact for Turkish food prices

Directory of Open Access Journals (Sweden)

Meltem Chadwick

2017-06-01

Full Text Available Asymmetric volatility is a widely encountered concept particularly in financial series. It refers to the case that “bad news” generates more volatility than “good news” of equal magnitude. In an inflationary environment “bad news” is disclosed as increasing inflation that is expected to generate higher volatility. The present article examines whether unexpected price changes affect the volatility of prices asymmetrically for 90 retail food items of the Turkish consumer price index. These 90 food items have a weight of approximately 20 percent in headline consumer price index (CPI. We employ exponential generalized autoregressive conditional heteroscedastic (EGARCH model to extract asymmetric volatility, using monthly data between January 2003 and January 2017. Our results reveal that volatility of food prices respond asymmetrically to unexpected price shocks for 62 percent of the retail food items.
OPEC's optimal crude oil price

International Nuclear Information System (INIS)

Horn, Manfred

2004-01-01

OPEC decided to stabilise oil prices within a range of 22-28 US Dollar/barrel of crude oil. Such an oil-price-level is far beyond the short and long run marginal costs of oil production, beyond even that in regions with particularly high costs. Nevertheless, OPEC may achieve its goal if world demand for oil increases substantially in the future and oil resources outside the OPEC are not big enough to accordingly increase production. In this case OPEC, which controls about 78% of world oil reserves, has to supply a large share of that demand increase. If we assume OPEC will behave as a partial monopolist on the oil market, which takes into consideration the reaction of the other producers to its own sales strategy, it can reach its price target. Lower prices before 2020 are probable only if the OPEC cartel breaks up. Higher prices are possible if production outside OPEC is inelastic as assumed by some geologists, but they would probably stimulate the production of unconventional oil based on oil sand or coal. Crude oil prices above 30 US Dollar/barrel are therefore probably not sustainable for a long period. (Author)

A joint estimation of price-cost margins and sunk capital. Theory and evidence from the European electricity industry

International Nuclear Information System (INIS)

Roeger, W.; Warzynski, F.

2004-01-01

In this paper, we propose a new methodology to jointly estimate market power and the importance of sunk capital extending the work of Hall (1988) and Roeger (1995). Wc then apply this new technique to the European electricity industry using firm level data for the period 1994-1999, and analyze the impact of the 1996 European directive to liberalize electricity markets. We find that the average price cost margin has declined from 0.29 in 1994 to 0.22 in 1999. Moreover, the magnitude of the decline is linked to firm size: the largest firms have experienced a larger percentage fall. The variable cost parameter has increased from 0.36 in 1994 to 0.56 in 1999. The main reason of the change is the switch of the relationship between real labor productivity and the share of variable capital. Our results therefore document a more competitive electricity market and a more flexible and more efficient use of capital. (au)
Market structure, price rigidity, and performance in the Indonesian food and beverages industry

NARCIS (Netherlands)

Setiawan, M.

2012-01-01

Keywords: industrial concentration, price rigidity, technical efficiency, price-cost margin, Structure-Conduct-Performance (SCP), new empirical industrial organization (NEIO), Indonesian food and beverages industry, Data Envelopment Analysis (DEA), system of equations
Optimal pricing and investment in the electricity sector in Tamil Nadu, India

Science.gov (United States)

Murthy, Ranganath Srinivas

2001-07-01

Faulty pricing policies and inadequate investment in the power sector are responsible for the chronic power shortages that plague Tamil Nadu and the rest of India. Formulae for optimal pricing rules are derived for a social welfare maximizing Electricity Board which sells electricity that is used both as an intermediate, and as a final good. Because of distributional constraints, the optimal prices deviate systematically from marginal costs. Optimal relative price-marginal cost differentials are computed for Tamil Nadu, and are found to indicate a lower degree of subsidization than the prevailing prices. The rationalization of electricity tariffs would very likely increase the Board's revenues. The cost-effectiveness of nuclear power in India is examined by comparing actual data for the Madras Atomic Power Project and the Singrauli coal-fired thermal power station. The conventional (non-environmental) costs of power generation are compared at both market prices and shadow prices, calculated according to the UNIDO guidelines for project evaluation. Despite favorable assumptions for the costs of the nuclear plant, coal had a decided edge over nuclear in Tamil Nadu. Remarkably, the edge varied little when market prices are replaced by shadow prices in the computations. With regard to the environmental costs, far too much remains unknown. More research is therefore needed on the environmental impacts of both types of power generation before a final choice can be made.
Three essays on access pricing

Science.gov (United States)

Sydee, Ahmed Nasim

In the first essay, a theoretical model is developed to determine the time path of optimal access price in the telecommunications industry. Determining the optimal access price is an important issue in the economics of telecommunications. Setting a high access price discourages potential entrants; a low access price, on the other hand, amounts to confiscation of private property because the infrastructure already built by the incumbent is sunk. Furthermore, a low access price does not give the incumbent incentives to maintain the current network and to invest in new infrastructures. Much of the existing literature on access pricing suffers either from the limitations of a static framework or from the assumption that all costs are avoidable. The telecommunications industry is subject to high stranded costs and, therefore, to address this issue a dynamic model is imperative. This essay presents a dynamic model of one-way access pricing in which the compensation involved in deregulatory taking is formalized and then analyzed. The short run adjustment after deregulatory taking has occurred is carried out and discussed. The long run equilibrium is also analyzed. A time path for the Ramsey price is shown as the correct dynamic price of access. In the second essay, a theoretical model is developed to determine the time path of optimal access price for an infrastructure that is characterized by congestion and lumpy investment. Much of the theoretical literature on access pricing of infrastructure prescribes that the access price be set at the marginal cost of the infrastructure. In proposing this rule of access pricing, the conventional analysis assumes that infrastructure investments are infinitely divisible so that it makes sense to talk about the marginal cost of investment. Often it is the case that investments in infrastructure are lumpy and can only be made in large chunks, and this renders the marginal cost concept meaningless. In this essay, we formalize a model of
The Access Pricing Problem: A Synthesis.

OpenAIRE

Armstrong, Mark; Doyle, Chris; Vickers, John

1996-01-01

The Baumol-Willig efficient component pricing rule states that it is efficient to set the price of access to an essential facility equal to the direct cost of access plus the opportunity cost to the integrated access provider. The authors analyze the relevant notion of 'opportunity cost' under various assumptions about demand and supply conditions, including product differentiation, bypass, and substitution possibilities, which all reduce opportunity cost compared to the benchmark case. They ...
Canadian natural gas market dynamics and pricing : an update

International Nuclear Information System (INIS)

2002-10-01

This energy market assessment (EMA) report discusses natural gas price formation and describes the current functioning of regional gas markets in Canada. This EMA also describes the factors affecting the price of natural gas in Canada and examines natural gas markets on a region-by region basis. It is shown that as part of an integrated North American market, prices of natural gas in Canada reflect supply and demand factors in both Canada and the United States. During the low oil price period of 1997/1998, high demand for natural gas outpaced the supply because of low drilling and production activity by producers. In response to the increased demand and lower levels of supply, the price of natural gas increased significantly in 1999 and 2000. This was followed by a period of market adjustment. The importance of electronic trading systems for enhancing price discovery was also discussed with reference to how spot and futures markets allow market participants to manage price volatility. It was determined that Canadians have had access to natural gas on terms and conditions equal to export customers, and at equal pricing. In early November 2000, natural gas prices in North American began to rise due to low levels of natural gas in storage. The price shocks were felt unevenly across the North American market. In response to the high prices, consumers conserved energy use, and many industrial users switched to cheaper fuels. By the spring 2001, demand continued to decrease at a time when production was high. These factors contributed to the downward pressure on gas prices. This EMA discusses the structure of market transactions and market adjustment mechanisms. It is presented in the context of the approaching 2002/2003 winter season where the tightening between natural gas supply and demand is expected to result in price volatility. 28 figs
A Pedagogical Note on the Superiority of Price-Cap Regulation to Rate-of-Return Regulation

Science.gov (United States)

Currier, Kevin M.; Jackson, Brian K.

2008-01-01

The two forms of natural monopoly regulation that are typically discussed in intermediate microeconomics textbooks are marginal cost pricing and average cost pricing (rate-of-return regulation). However, within the last 20 years, price-cap regulation has largely replaced rate-of-return regulation because of the former's potential to generate more…
Managing price risk - setting and implementing strategies

International Nuclear Information System (INIS)

Haines, D.

1999-01-01

The three hedging strategies for price risk management within the natural gas industry are described. The three strategies are: (1) speculative trader (characterized by 'trading for profit, i.e. small margin/large volumes); (2) price optimizer (the objective here is to outperform the market in the establishment of a price); and (3) strategic hedger( the characteristic concern in this strategy is to manage long-term company goals, i.e. balance sheet orientation). The strategies are not mutually exclusive, but overlapping areas can be the source of considerable confusion. Any firm can enter into more than one of these strategies. Integrated companies will adopt very different strategies for upstream versus downstream operations. Details of the three strategies are provided
Impact of the carbon price on the integrating European electricity market

International Nuclear Information System (INIS)

Aatola, Piia; Ollikainen, Markku; Toppinen, Anne

2013-01-01

We study the impact of the carbon price on the integrating electricity market in the EU. Our theoretical framework suggests that the price of carbon has a positive but uneven impact on electricity prices depending on the marginal production plant. The carbon price may increase price differences in the short run. We apply time series analysis on daily forward data from 2003 to 2011 and investigate whether we can find empirical evidence for our analytical findings. Our results support the hypotheses that integration in electricity prices has increased over time and that the carbon price has a positive but uneven impact on the integration of prices. - Highlights: • We model the integrating European electricity market under emissions trading scheme. • We examine the impact of carbon price on the electricity market prices. • We test theoretical hypotheses with econometric models. • Results show carbon price has a positive but uneven impact on electricity prices. • Integration among electricity prices has increased during 2003–2011
Price Strategies between a Dominant Retailer and Manufacturers

Science.gov (United States)

Cho, Hsun Jung; Mak, Hou Kit

2009-08-01

Supply chain-related game theoretical applications have been discussed for decades. This research accounts for the emergence of a dominant retailer, and the retailer Stackelberg pricing models of distribution channels. Research in the channel pricing game may use different definitions of pricing decision variables. In this research, we pay attentions to the retailer Stackelberg pricing game, and discuss the effects when choosing different decision variables. According the literature it was shown that the strategies between channel members depend critically on the form of the demand function. Two different demand forms—linear and non-linear—will be considered in our numerical example respectively. Our major finding is the outcomes are not relative to manufacturers' pricing decisions but to the retailer's pricing decision and choosing percentage margin as retailer's decision variable is the best strategy for the retailer but worst for manufacturers. The numerical results show that it is consistence between linear and non-linear demand form.
The Impact of Pre-closing Implementation to Price Efficiency in Indonesia Stock Exchange

Directory of Open Access Journals (Sweden)

Gilang Praditiyo

2014-01-01

Full Text Available Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} Indonesia Stock Exchange has really concerned about improving stock market quality these days. One of the effort is pre-closing trading session implementation. It refers to Decision of the Board of Directors of The Indonesia Stock Exchange Number Kep-00399/BEI/11-2012, regarding Amendment to Rule Number II-A concerning Equity-Type Securities Trading. The rule is effective on 2nd Januar, 2013 and Indonesia Stock Exchange has implemented it since that date. The purposes of pre-closing implementation are to mitigate marking the close, which is the practice of buying security at the very end of the trading day at a significantly higher price than the current price of the security, and to improve market quality. This paper attempts to veryfy whether the impact of pre-closing implementation to price efficiency is positive or not. The result shows that the pre-closing implementation has the positive impact to price efficiency. It reduces the return volatility and market manipulation at the closing time which also means that the pre-closing implementation has effectively improved market quality in Indonesia Stock Exchange. Keywords:Pre-closing, price manipulation, marking the close, volatility, price efficiency.
Marginal costs and co-benefits of energy efficiency investments

International Nuclear Information System (INIS)

Jakob, Martin

2006-01-01

Key elements of present investment decision-making regarding energy efficiency of new buildings and the refurbishment of existing buildings are the marginal costs of energy efficiency measures and incomplete knowledge of investors and architects about pricing, co-benefits and new technologies. This paper reports on a recently completed empirical study for the Swiss residential sector. It empirically quantifies the marginal costs of energy efficiency investments (i.e. additional insulation, improved window systems, ventilation and heating systems and architectural concepts). For the private sector, first results on the economic valuation of co-benefits such as improved comfort of living, improved indoor air quality, better protection against external noise, etc. may amount to the same order of magnitude as the energy-related benefits are given. The cost-benefit analysis includes newly developed technologies that show large variations in prices due to pioneer market pricing, add-on of learning costs and risk components of the installers. Based on new empirical data on the present cost-situation and past techno-economic progress, the potential of future cost reduction was estimated applying the experience curve concept. The paper shows, for the first time, co-benefits and cost dynamics of energy efficiency investments, of which decision makers in the real estate sector, politics and administrations are scarcely aware
FUTURE FOSSIL FUEL PRICE IMPACTS ON NDC ACHIEVEMENT; ESTIMATION OF GHG EMISSIONS AND MITIGATION COSTS

Directory of Open Access Journals (Sweden)

Yosuke Arino

2017-12-01

Full Text Available The Shale Revolution in the US, a supply-side innovation in oil and gas production, has been dramatically changing the world’s fossil fuel energy markets – leading to a decrease in oil, gas and coal prices. Some projections suggest that low fossil fuel prices might continue at least over the next few decades. Uncertainty in fossil fuel prices might affect the levels of emission reductions expected from submitted nationally determined contributions (NDCs and/or influence the difficulty of achieving the NDCs. This paper evaluated the impact of different (high, medium, and low fossil fuel prices, sustained through to 2050, on worldwide GHG emissions reductions and associated costs (mainly marginal abatement costs (MACs. Total global GHG emissions were estimated to be 57.5-61.5 GtCO2eq by 2030, with the range shown reflecting uncertainties about fossil fuel prices and the target levels of several NDCs (i.e., whether their upper or lower targets were adopted. It was found that lower fuel prices not only diminished the environmental effectiveness of global NDCs but also widened regional differences of marginal and total abatement costs, thereby generating more room for carbon leakage. One possible policy direction in terms of abatement efficiency, fairness and environmental effectiveness would be to require countries with low marginal and total abatement costs but having a major influence on global GHG emissions (such as China and India to increase their mitigation efforts, especially in a low-fuelprice world.
Loss Aversion and Time-Differentiated Electricity Pricing

Energy Technology Data Exchange (ETDEWEB)

Spurlock, C. Anna [Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)

2015-06-01

I develop a model of loss aversion over electricity expenditure, from which I derive testable predictions for household electricity consumption while on combination time-of-use (TOU) and critical peak pricing (CPP) plans. Testing these predictions results in evidence consistent with loss aversion: (1) spillover effects - positive expenditure shocks resulted in significantly more peak consumption reduction for several weeks thereafter; and (2) clustering - disproportionate probability of consuming such that expenditure would be equal between the TOUCPP or standard flat-rate pricing structures. This behavior is inconsistent with a purely neoclassical utility model, and has important implications for application of time-differentiated electricity pricing.
Electricity price forecasting using Enhanced Probability Neural Network

International Nuclear Information System (INIS)

Lin, Whei-Min; Gow, Hong-Jey; Tsai, Ming-Tang

2010-01-01

This paper proposes a price forecasting system for electric market participants to reduce the risk of price volatility. Combining the Probability Neural Network (PNN) and Orthogonal Experimental Design (OED), an Enhanced Probability Neural Network (EPNN) is proposed in the solving process. In this paper, the Locational Marginal Price (LMP), system load and temperature of PJM system were collected and the data clusters were embedded in the Excel Database according to the year, season, workday, and weekend. With the OED to smooth parameters in the EPNN, the forecasting error can be improved during the training process to promote the accuracy and reliability where even the ''spikes'' can be tracked closely. Simulation results show the effectiveness of the proposed EPNN to provide quality information in a price volatile environment. (author)
Electricity pricing: optimal operation and investment by industrial consumers

Energy Technology Data Exchange (ETDEWEB)

Outhred, H.R.; Kaye, R.J.; Sutanto, D.; Manimaran, R.; Bannister, C.H.; Lee, Y.B.

1988-08-01

Ongoing research in the areas of economically efficient electricity pricing and industrial consumer response is described. A new electricity pricing theory is described that incorporates future uncertainty and intertemporal linkages between decisions. It indicates that electricity prices should contain two terms - short-run marginal cost plus a term that reflects how each particular decision is likely to affect future global welfare. A practical implementation using spot prices and forward contracts plus financial instruments for risk sharing and decision coordination is explored, and a procedure for developing long-term pricing policy is considered. The operation of industrial plant has been investigated and models developed to optimize plant behaviour in response to spot prices and forward contracts for electricity. These models are described and results of simulation studies discussed. The economic efficiency and risk sharing advantages of this advanced tariff structure compared with a conventional time-of-use tariff are illustrated.
[Prudent use price controls in Chinese medicines market: based on statistical data analysis].

Science.gov (United States)

Yang, Guang; Wang, Nuo; Huang, Lu-Qi; Qiu, Hong-Yan; Guo, Lan-Ping

2014-01-01

A dispute about the decreasing-price problem of traditional Chinese medicine (TCM) has recently arisen. This article analyzes the statistical data of 1995-2011 in China, the results showed that the main responsibility of expensive health care has no direct relationship with the drug price. The price index of TCM rose significantly slower than the medicine prices, the production margins of TCM affected by the material prices has been diminishing since 1995, continuous price reduction will further depress profits of the TCM industry. Considering the pros and cons of raw materials vary greatly in price, decreasing medicine price behavior will force enterprises to use inferior materials in order to maintain corporate profits. The results have the guiding meaning to medicine price management.
Analysis of Consumers' Preferences and Price Sensitivity to Native Chickens.

Science.gov (United States)

Lee, Min-A; Jung, Yoojin; Jo, Cheorun; Park, Ji-Young; Nam, Ki-Chang

2017-01-01

This study analyzed consumers' preferences and price sensitivity to native chickens. A survey was conducted from Jan 6 to 17, 2014, and data were collected from consumers (n=500) living in Korea. Statistical analyses evaluated the consumption patterns of native chickens, preference marketing for native chicken breeds which will be newly developed, and price sensitivity measurement (PSM). Of the subjects who preferred broilers, 24.3% do not purchase native chickens because of the dryness and tough texture, while those who preferred native chickens liked their chewy texture (38.2%). Of the total subjects, 38.2% preferred fried native chickens (38.2%) for processed food, 38.4% preferred direct sales for native chicken distribution, 51.0% preferred native chickens to be slaughtered in specialty stores, and 32.4% wanted easy access to native chickens. Additionally, the price stress range (PSR) was 50 won and the point of marginal cheapness (PMC) and point of marginal expensiveness (PME) were 6,980 won and 12,300 won, respectively. Evaluation of the segmentation market revealed that consumers who prefer broiler to native chicken breeds were more sensitive to the chicken price. To accelerate the consumption of newly developed native chicken meat, it is necessary to develop a texture that each consumer needs, to increase the accessibility of native chickens, and to have diverse menus and recipes as well as reasonable pricing for native chickens.
VALUE-ADDED SERVICE INVESTING AND PRICING STRATEGIES FOR A TWO-SIDED PLATFORM UNDER INVESTING RESOURCE CONSTRAINT

Institute of Scientific and Technical Information of China (English)

Guowei Dou; Ping He

2017-01-01

Investing on value-added service (VAS) amplifies users' participation and platform profit.However,the investing resource is usually limited in practice.This paper investigates VAS investing and pricing strategies for a two-sided platform under investing resource constraint.We reveal that with VAS investment,Subsidizing can still be done to enlarge users' demand,even when the investing cost becomes higher.For optimal pricing strategies,the network effect will be the dominating determinant if the gap between two marginal cross-side benefits (i.e.the benefit that users obtain when each new user join the other side of the platform) is large.Interestingly,we show that with the increase of the marginal investing cost,users might either be priced higher or lower.If the marginal investing cost increases to a high level,and the gap between the two marginal cross-side benefits is large,lowering the access fee for users possessing the higher cross-side network effect does not necessarily compensate more profit loss caused by higher cost.Moreover,after VAS is developed,raising the access fee for those whose marginal investing benefit is large does not necessarily generate more profit as well.The opposite strategy further enlarges users' utility,and promotes the investment to benefit more users.
Marginal value of natural water in agriculture: a study in the suburbs of Mekelle City, Ethiopia

NARCIS (Netherlands)

Gezahegn, T.W.; Xueqin Zhu, Xueqin

2015-01-01

In areas where markets for natural water are lacking, information on its marginal value can be an important tool for proper pricing to achieve efficient allocation of the resource. This article investigates the marginal value of natural water (rainwater used as a proxy) in agricultural crop

Impact of variable renewable production on electricity prices in Germany: a Markov switching model

International Nuclear Information System (INIS)

Martin de Lagarde, Cyril; Lantz, Frederic

2016-01-01

This paper aims at assessing the impact of renewable energy sources (RES) production on electricity spot prices. To do so, we use a two-regime Markov Switching (MS) model, that enables to disentangle the so-called 'merit-order effect' due to wind and solar photovoltaic productions (used in relative share of the electricity demand), depending on the price being high or low. We find that there are effectively two distinct price regimes that are put to light thanks to an inverse hyperbolic sine transformation that allows to treat negative prices. We also show that these two regimes coincide quite well with two regimes for the electricity demand (load). Indeed, when demand is low, prices are low and the merit-order effect is lower than when prices are high, which is consistent with the fact that the inverse supply curve is convex (i.e. has increasing slope). To illustrate this, we computed the mean marginal effects of RES production and load. On average, an increase of 1 GW of wind will decrease the price in regime 1 (resp. 2) by 0.77 euro /MWh (resp. 1 euro /MWh). The influence of solar is slightly weaker, as an extra gigawatt lowers the price of 0.73 euro /MWh in period 1, and 0.96 euro /MWh in regime 2. On the contrary, if the demand increases by 1 GW in regime 1 (resp. 2), the price increases on average by 0.93 euro /MWh (resp. 1.18 euro /MWh). Although we made sure these marginal effects are significantly different from one another, they are much more variable than the estimated coefficients of the model. Also, note that these marginal effects are only valid inside each regime when there is no switching. The latter regime partly corresponds to the high load regime, at the exception of periods during which RES production is high. The impact on volatility could also be observed: the variance of the (transformed) price is higher during the high-price regime than in the low-price one. In addition to the switching of the coefficients, we allowed the probabilities of
Long memory in German energy price indices

Energy Technology Data Exchange (ETDEWEB)

Barros, Carlos P. [Lisbon Univ. (Portugal). Inst. Superior de Economia e Gestao; Caporale, Guglielmo Maria [Brunel Univ., London (United Kingdom). Centre for Empirical Finance; Gil-Alana, Luis A. [Navarra Univ., Pamplona (Spain). Faculty of Economics and Business Administration

2012-09-15

This study examines the long-memory properties of German energy price indices (specifically, import and export prices, as well as producer and consumer prices) for hard coal, lignite, mineral oil and natural gas adopting a fractional integration modelling framework. The analysis is undertaken using monthly data from January 2000 to August 2011. The results suggest nonstationary long memory in the series (with orders of integration equal to or higher than 1) when breaks are not allowed for. However, endogenous break tests indicate a single break in all series except for producer prices for lignite for which two breaks are detected. When such breaks are taken into account, and with autocorrelated disturbances, evidence of mean reversion is found in practically all cases.
48 CFR 52.219-2 - Equal Low Bids.

Science.gov (United States)

2010-10-01

.... If the bidder is awarded a contract as a result of receiving priority consideration under this... AND FORMS SOLICITATION PROVISIONS AND CONTRACT CLAUSES Text of Provisions and Clauses 52.219-2 Equal...) amount to more than 50 percent of the contract price. (c) Failure to identify the labor surplus areas as...
Real-time pricing when some consumers resist in saving electricity

International Nuclear Information System (INIS)

Salies, Evens

2013-01-01

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. - Highlights: • We model consumers switching from uniform to real-time electricity pricing (RTP). • Half the consumer population is pro-RTP and half resists saving electricity. • Efficient RTP is feasible but is incompatible with mass adoption
Optimization of fuel cycles: marginal loss values

International Nuclear Information System (INIS)

Gaussens, J.; Lasteyrie, B. de; Doumerc, J.

1965-01-01

Uranium processing from the pit to the fuel element rod entails metal losses at every step. These losses become more and more expensive with the elaboration of the metal. Some of the uranium must be accepted as definitely lost whilst the rest could be recovered and recycled. The high cost of these losses, whether they are recycled or not, and the fact that the higher the enrichment is the higher their costs are, make it necessary to take them into account when optimizing fuel cycles. It is therefore felt important to determine their most desirable level from an economic point of view at the various nuclear fuel processing stages. However, in France as in some other countries, fissile material production is a state concern, whilst fuel element fabrication is carried out by private enterprise. Optimization criteria and the economic value of losses are therefore different for each of the two links in the fabrication chain. One can try in spite of this to reach an optimum which would conform to public interest, without interfering with the firm's sales policy. This entails using the fact that for a given output marginal costs are equal at the optimum. One can therefore adjust the level of the losses to attain this equation of marginal costs, as these are easier to obtain from the firm than a justification of the actual prices. One notices moreover that, although mainly concerned with losses, this global analysis can bring both the state and the firm to a better use of other production factors. An account is given of the theory of this economic optimization method and practical applications in the field of natural uranium-graphite moderated and CO 2 cooled reactor fuel element fabrication are offered. (authors) [fr
Road pricing with complications

DEFF Research Database (Denmark)

Fosgerau, Mogens; Van Dender, Kurt

2013-01-01

The rationale for congestion charges is that by internalising the marginal external congestion cost, they restore efficiency in the transport market. In the canonical model underlying this view, congestion is a static phenomenon, users are taken to be homogenous, there is no travel time risk......, and a highly stylised model of congestion is used. The simple analysis also ignores that real pricing schemes are only rough approximations to ideal systems and that inefficiencies in related markets potentially affect the case for congestion charges. The canonical model tends to understate the marginal...... external congestion cost because it ignores user heterogeneity and trip timing inefficiencies. With respect to the relevance of interactions between congestion and congestion charges and tax distortions and distributional concerns, recent insights point out that there is no general case for modifying...
Hospital market concentration, pricing, and profitability in orthopedic surgery and interventional cardiology.

Science.gov (United States)

Robinson, James C

2011-06-01

To examine the association between hospital market concentration and pricing. Hospitals have been merging into systems that potentially wield bargaining power over private health insurers. Concern is growing among policy makers that these systems may respond to provisions of the 2010 health reform legislation by further increasing consolidation and prices. Multivariate statistical methods were used to evaluate the association between hospital market concentration, prices, and profits (contribution margins) for commercially insured patients admitted for any of 6 major cardiac and orthopedic surgery procedures, adjusting for characteristics of the patient (diagnoses, comorbidities,complications) and of the hospital (size, patient volume, teaching status). Data were obtained on 11,330 patients treated in 61 hospitals in 27 markets across 8 states in 2008. Hospital prices for patients in concentrated markets were higher than hospital prices for otherwise-comparable patients in competitive markets by 25.1% for coronary angioplasty, 13.0%for cardiac rhythm management (CRM) device insertion, 19.2% for total knee replacement, 24.1%for total hip replacement, 19.3% for lumbar spine fusion, and 22.7% for cervical spine fusion (P markets by $5259 for angioplasty, $3417 for CRM device insertion, $4123 for total knee replacement, $5889 for total hip replacement, $7931 for lumbar spine fusion, and $4663 for cervical spine fusion (P markets charge significantly higher prices and earn significantly higher margins from private insurers than do hospitals in competitive markets.
Ethics, equality and evidence in health promotion

DEFF Research Database (Denmark)

Vallgårda, Signild

2014-01-01

Abstract Aim: The Danish National Board of Health has expressed its commitment to social equality in health, evidence-informed health promotion and public health ethics, and has issued guidelines for municipalities on health promotion, in Danish named prevention packages.The aim of this article...... is to analyse whether the Board of Health adheres to ideals of equality, evidence and ethics in these guidelines. Methods: An analysis to detect statements about equity, evidence and ethics in 10 health promotion packages directed at municipalities with the aim of guiding the municipalities towards evidence......-informed disease prevention and health promotion. Results: Despite declared intentions of prioritizing social equality in health, these intentions are largely absent from most of the packages.When health inequalities are mentioned, focus is on the disadvantaged or the marginalized. Several interventions...
Asset Pricing Implications of Firms' Financing Constraints

OpenAIRE

Gomes, Joao F; Yaron, Amir; Zhang, Lu

2002-01-01

We incorporate costly external finance in a production based asset pricing model and investigate whether financing frictions are quantitatively important for pricing a cross-section of expected returns. We show that the common assumptions about the nature of the financing frictions are captured by a simple ‘financing cost’ function, equal to the product of the financing premium and the amount of external finance. This approach provides a tractable framework to examine the role of financing fr...
Assessment of Long-Run Marginal Costing of Transmission and ...

African Journals Online (AJOL)

The Long-Run Marginal Costing (LRMC) technique is used as a cost-reflecting pricing method and finds useful application in the recovery of the total investment cost for the use of a transmission or distribution network. This paper reviews recent applications of this technique based on some examples from United Kingdom, ...
Electricity pricing model in thermal generating stations under deregulation

International Nuclear Information System (INIS)

Reji, P.; Ashok, S.; Moideenkutty, K.M.

2007-01-01

In regulated public utilities with competitive power markets, deregulation has replaced the monopoly. Under the deregulated power market, the electricity price primarily depends on market mechanism and power demand. In this market, generators generally follow marginal pricing. Each generator fixes the electricity price based on their pricing strategy and it leads to more price volatility. This paper proposed a model to determine the electricity price considering all operational constraints of the plant and economic variables that influenced the price, for a thermal generating station under deregulation. The purpose of the model was to assist existing stations, investors in the power sector, regulatory authorities, transmission utilities, and new power generators in decision-making. The model could accommodate price volatility in the market and was based on performance incentive/penalty considering plant load factor, availability of the plant and peak/ off peak demand. The model was applied as a case study to a typical thermal utility in India to determine the electricity price. It was concluded that the case study of a thermal generating station in a deregulated environment showed that the electricity price mainly depended on the gross calorific value (GCV) of fuel, mode of operation, price of the fuel, and operating charges. 11 refs., 2 tabs., 1 fig
A dispatch based pricing model for the New Zealand electricity market

International Nuclear Information System (INIS)

Ring, B.J.; Read, E.G.

1996-01-01

Work undertaken for the New Zealand transmission grid is described. Prices derived from an observed system dispatch can be used in the short-run coordination of a competitive wholesale electricity market. These prices vary across space and time, reflecting differences in marginal costs and changing demand. Markets for emergency reserve generating capacity can be integrated with a market for power. Used in conjunction with longer term contracts, such short-run prices have the potential to allow competitive power system operation without significant loss of coordination efficiencies. 2 figs., 26 refs
Pricing Energy and Ancillary Services in a Day-Ahead Market for a Price-Taker Hydro Generating Company Using a Risk-Constrained Approach

Directory of Open Access Journals (Sweden)

Perica Ilak

2014-04-01

Full Text Available This paper analyzes a price-taker hydro generating company which participates simultaneously in day-ahead energy and ancillary services markets. An approach for deriving marginal cost curves for energy and ancillary services is proposed, taking into consideration price uncertainty and opportunity cost of water, which can later be used to determine hourly bid curves. The proposed approach combines an hourly conditional value-at-risk, probability of occurrence of automatic generation control states and an opportunity cost of water to determine energy and ancillary services marginal cost curves. The proposed approach is in a linear constraint form and is easy to implement in optimization problems. A stochastic model of the hydro-economic river basin is presented, based on the actual Vinodol hydropower system in Croatia, with a complex three-dimensional relationship between the power produced, the discharged water, and the head of associated reservoir.
Retrospective modeling of the merit-order effect on wholesale electricity prices from distributed photovoltaic generation in the Australian National Electricity Market

International Nuclear Information System (INIS)

McConnell, Dylan; Hearps, Patrick; Eales, Dominic; Sandiford, Mike; Dunn, Rebecca; Wright, Matthew; Bateman, Lachlan

2013-01-01

In electricity markets that use a merit order dispatch system, generation capacity is ranked by the price that it is bid into the market. Demand is then met by dispatching electricity according to this rank, from the lowest to the highest bid. The last capacity dispatched sets the price received by all generation, ensuring the lowest cost provision of electricity. A consequence of this system is that significant deployments of low marginal cost electricity generators, including renewables, can reduce the spot price of electricity. In Australia, this prospect has been recognized in concern expressed by some coal-fired generators that delivering too much renewable generation would reduce wholesale electricity prices. In this analysis we calculate the likely reduction of wholesale prices through this merit order effect on the Australian National Electricity Market. We calculate that for 5 GW of capacity, comparable to the present per capita installation of photovoltaics in Germany, the reduction in wholesale prices would have been worth in excess of A$1.8 billion over 2009 and 2010, all other factors being equal. We explore the implications of our findings for feed-in tariff policies, and find that they could deliver savings to consumers, contrary to prevailing criticisms that they are a regressive form of taxation. - Highlights: ► We model the impact of photovoltaic generation on the Australian electricity market. ► Photovoltaic generation depresses electricity prices, particularly in summer peaks. ► Over the course of a year, the depression in wholesale prices has significant value. ► 5 GW of solar generation would have saved $1.8 billion in the market over two years. ► The depression of wholesale prices offsets the cost of support mechanisms
Prices, technology development and the rebound effect

International Nuclear Information System (INIS)

Birol, F.; Keppler, J.H.

2000-01-01

Energy efficiency is the critical parameter for policies that aim at reducing energy consumption while maintaining or even boosting economic growth. The two main options to influence energy efficiency are changes in relative prices, i.e., raising the price of energy through economic instruments, or to introduce new technologies which increase the productivity of each unit of energy. This paper is based on the notion that in an equilibrium economy the marginal economic productivity is identical for all factors, i.e., energy, labour, knowledge and capital. From this premise two main conclusions can be drawn. First, any change in price or technology will have an impact on the whole economy by creating feedbacks through the substitution of factors of production and goods, as well as increased wealth. Second, the two policy approaches, changing relative prices and technology development, are not opposite to each other. They are the two faces of the same reality and should be developed and promoted simultaneous and consistently. (Author)
Measuring the CO2 shadow price for wastewater treatment: A directional distance function approach

International Nuclear Information System (INIS)

Molinos-Senante, María; Hanley, Nick; Sala-Garrido, Ramón

2015-01-01

Highlights: • The shadow price of CO 2 informs about the marginal abatement cost of this pollutant. • It is estimated the shadow price of CO 2 for wastewater treatment plants. • The shadow prices depend on the setting of the directional vectors of the distance function. • Sewage sludge treatment technology affects the CO 2 shadow price. - Abstract: The estimation of the value of carbon emissions has become a major research and policy topic since the establishment of the Kyoto Protocol. The shadow price of CO 2 provides information about the marginal abatement cost of this pollutant. It is an essential element in guiding environmental policy issues, since the CO 2 shadow price can be used when fixing carbon tax rates, in environmental cost-benefit analysis and in ascertaining an initial market price for a trading system. The water industry could play an important role in the reduction of greenhouse gas (GHG) emissions. This paper estimates the shadow price of CO 2 for a sample of wastewater treatment plants (WWTPs), using a parametric quadratic directional distance function. Following this, in a sensitivity analysis, the paper evaluates the impact of different settings of directional vectors on the shadow prices. Applying the Mann–Whitney and Kruskal–Wallis non-parametric tests, factors affecting CO 2 prices are investigated. The variation of CO 2 shadow prices across the WWTPs evaluated argues in favour of a market-based approach to CO 2 mitigation as opposed to command-and-control regulation. The paper argues that the estimation of the shadow price of CO 2 for non-power enterprises can provide incentives for reducing GHG emissions
Interdependent demands, regulatory constraint, and peak-load pricing. [Assessment of Bailey's model

Energy Technology Data Exchange (ETDEWEB)

Nguyen, D T; Macgregor-Reid, G J

1977-06-01

A model of a regulated firm which includes an analysis of peak-load pricing has been formulated by E. E. Bailey in which three alternative modes of regulation on a profit-maximizing firm are considered. The main conclusion reached is that under a regulation limiting the rate of return on capital investment, price reductions are received solely by peak-users and that when regulation limiting the profit per unit of output or the return on costs is imposed, there are price reductions for all users. Bailey has expressly assumed that the demands in different periods are interdependent but has somehow failed to derive the correct price and welfare implications of this empirically highly relevant assumption. Her conclusions would have been perfectly correct for marginal revenues but are quite incorrect for prices, even if her assumption that price exceeds marginal revenues in every period holds. This present paper derives fully and rigorously the implications of regulation for prices, outputs, capacity, and social welfare for a profit-maximizing firm with interdependent demands. In section II, Bailey's model is reproduced and the optimal conditions are given. In section III, it is demonstrated that under the conditions of interdependent demands assumed by Bailey herself, her often-quoted conclusion concerning the effects of the return-on-investment regulation on the off-peak price is invalid. In section IV, the effects of the return-on-investment regulation on the optimal prices, outputs, capacity, and social welfare both for the case in which the demands in different periods are substitutes and for the case in which they are complements are examined. In section V, the pricing and welfare implications of the return-on-investment regulation are compared with the two other modes of regulation considered by Bailey. Section VI is a summary of all sections. (MCW)
The Connection Between House Price Appreciation and Property Tax Revenues*

OpenAIRE

Lutz, Byron F.

2008-01-01

This paper explores two aspects of the connection between property tax revenues and house prices. First, I estimate the elasticity of property tax revenues with respect to house prices. This elasticity does not necessarily equal one as governments may adjust effective tax rates to offset changes in property values. Second, I examine the timing of the relationship. Institutional features of the property tax make it unlikely that changes in house prices will immediately influence tax revenues. ...
High Penetrated Wind Farm Impacts on the Electricity Price

DEFF Research Database (Denmark)

Haji Bashi, Mazaher; Yousefi, G. R.; Bak, Claus Leth

2016-01-01

of the high penetrated wind farm integration into electricity markets. Then, stochastic programming approach is employed to compare the volume of trades for a typical wind farm in a high and low wind penetrated market. Although increasing price spikes and volatility was reported in the literature......Energy trading policies, intermittency of wind farm output power, low marginal cost of the production, are the key factors that cause the wind farms to be effective on the electricity price. In this paper, the Danish electricity market is studied as a part of Nord Pool. Considering the completely...... fossil fuel free overview in Danish energy policies, and the currently great share of wind power (more than 100% for some hours) in supplying the load, it is an interesting benchmark for the future electricity markets. Negative prices, price spikes, and price volatility are considered as the main effects...
Stroke: a Hidden Danger of Margin Trading in Stock Markets.

Science.gov (United States)

Lin, Shu-Hui; Wang, Chien-Ho; Liu, Tsai-Ching; Chen, Chin-Shyan

2015-10-01

Using 10-year population data from 2000 through 2009 in Taiwan, this is the first paper to analyze the relationship between margin trading in stock markets and stroke hospitalizations. The results show that 3 and 6 days after an increase of margin trading in the Taiwan stock markets are associated with greater stoke hospitalizations. In general, a 1 % increase in total margin trading positions is associated with an increment of 2.5 in the total number of stroke hospitalizations, where the mean number of hospital admissions is 233 cases a day. We further examine the effects of margin trading by gender and age groups and find that the effects of margin trading are significant for males and those who are 45-74 years old only. In summary, buying stocks with money you do not have is quite risky, especially if the prices of those stocks fall past a certain level or if there is a sudden and severe drop in the stock market. There is also a hidden danger to one's health from margin trading. A person should be cautious before conducting margin trading, because while it can be quite profitable, danger always lurks just around the corner.

Cash dividends and futures prices on discontinuous filtrations

NARCIS (Netherlands)

Vellekoop, M.H.; Nieuwenhuis, J.W.

We derive a general formula for the futures price process without the restriction that the assets used in the future margin account are continuous and of finite variation. To do so, we model tradeable securities with dividends which are not necessarily cash dividends at fixed times or continuously
Pricing methodologies for congestion management in a deregulated ...

African Journals Online (AJOL)

DR OKE

new facilities into the existing system and the long term firm transactions. ... view. The probabilistic approach has been applied in [73-77] to OPF to compute the locational marginal pricing. ... smaller and provides a reduced incentive for investment when installed reserves are above the target. .... contingencies," IEEE Trans.
Prices paid for adult and paediatric antiretroviral treatment by low- and middle-income countries in 2012: high, low or just right?

Science.gov (United States)

Perriëns, Joseph H; Habiyambere, Vincent; Dongmo-Nguimfack, Boniface; Hirnschall, Gottfried

2014-01-01

A viable market for antiretroviral drugs in low- and middle-income countries is key to the continued scale-up of antiretroviral treatment. We describe the price paid by low- and middle-income countries for 10 first- and 7 second-line adult and paediatric treatment regimens from 2003 to 2012, and compare the price of their finished formulations with the price of their active pharmaceutical ingredients in 2005, 2007, 2010 and 2012. Between 2003 and 2012 the median price of adult first-line treatment regimens per treatment-year decreased from USD499 to USD122, and that of second-line regimens from USD2,934 to USD497. In 2005 adult formulations were sold for a price 170% higher than the cost of their active pharmaceutical ingredients. This margin had decreased to 28% in 2012. Between 2004 and 2013, the price of paediatric treatment per treatment-year decreased from USD585 to USD147 for first-line and from USD763 to USD288 for second-line treatment. In 2005, paediatric treatment regimens were sold at a price 231% higher than the cost of their active pharmaceutical ingredients. This margin remained high and was 195% in 2012. The prices paid for antiretroviral drugs by low- and middle-income countries decreased between 2003 and 2012. Although the margins on their sale decreased, there is likely still space for price reduction, especially for the more recent World Health Organization recommended adult first-line regimens and for paediatric treatment.
The Temptation of Zero Price: Event-Related Potentials Evidence of How Price Framing Influences the Purchase of Bundles

Directory of Open Access Journals (Sweden)

Haiying Ma

2018-04-01

Full Text Available Studies have revealed that consumers are susceptible to price framing effect, a common cognitive bias, due to their limited capacity in processing information. The effect of price framing in a bundling context and its neural correlates, however, remain not clearly characterized. The present study applied the event-related potentials (ERPs approach to investigate the role of price framing in information processing and purchase decision making in a bundling context. Three price frames were created with practically identical total prices (with a maximum difference of ¥0.1, which was about equal to 0.016 US dollars for a bundle with two components, a focal product and a tie-in product. In normal price condition (NP, both the focal and tie-in products were offered at a normal discounted price; in zero price condition (ZP, the tie-in product was offered free while the total price of the bundle remained the same as NP; whereas in low price condition (LP, the tie-in product was offered at a low token price (¥0.1, and the focal product shared the same price as the focal product of ZP. The behavioral results showed a higher purchase rate and a shorter reaction time for ZP in contrast to NP. Neurophysiologically, enlarged LPP amplitude was elicited by ZP relative to NP, suggesting that ZP triggered a stronger positive affect that could motivate decision to buy. Thus, this study provides both behavioral and neural evidence for how different price framing information is processed and ultimately gives rise to price framing effect in purchase decision making.
The Temptation of Zero Price: Event-Related Potentials Evidence of How Price Framing Influences the Purchase of Bundles.

Science.gov (United States)

Ma, Haiying; Mo, Zan; Zhang, Huijun; Wang, Cuicui; Fu, Huijian

2018-01-01

Studies have revealed that consumers are susceptible to price framing effect, a common cognitive bias, due to their limited capacity in processing information. The effect of price framing in a bundling context and its neural correlates, however, remain not clearly characterized. The present study applied the event-related potentials (ERPs) approach to investigate the role of price framing in information processing and purchase decision making in a bundling context. Three price frames were created with practically identical total prices (with a maximum difference of ¥0.1, which was about equal to 0.016 US dollars) for a bundle with two components, a focal product and a tie-in product. In normal price condition (NP), both the focal and tie-in products were offered at a normal discounted price; in zero price condition (ZP), the tie-in product was offered free while the total price of the bundle remained the same as NP; whereas in low price condition (LP), the tie-in product was offered at a low token price (¥0.1), and the focal product shared the same price as the focal product of ZP. The behavioral results showed a higher purchase rate and a shorter reaction time for ZP in contrast to NP. Neurophysiologically, enlarged LPP amplitude was elicited by ZP relative to NP, suggesting that ZP triggered a stronger positive affect that could motivate decision to buy. Thus, this study provides both behavioral and neural evidence for how different price framing information is processed and ultimately gives rise to price framing effect in purchase decision making.
The Temptation of Zero Price: Event-Related Potentials Evidence of How Price Framing Influences the Purchase of Bundles

Science.gov (United States)

Ma, Haiying; Mo, Zan; Zhang, Huijun; Wang, Cuicui; Fu, Huijian

2018-01-01

Studies have revealed that consumers are susceptible to price framing effect, a common cognitive bias, due to their limited capacity in processing information. The effect of price framing in a bundling context and its neural correlates, however, remain not clearly characterized. The present study applied the event-related potentials (ERPs) approach to investigate the role of price framing in information processing and purchase decision making in a bundling context. Three price frames were created with practically identical total prices (with a maximum difference of ¥0.1, which was about equal to 0.016 US dollars) for a bundle with two components, a focal product and a tie-in product. In normal price condition (NP), both the focal and tie-in products were offered at a normal discounted price; in zero price condition (ZP), the tie-in product was offered free while the total price of the bundle remained the same as NP; whereas in low price condition (LP), the tie-in product was offered at a low token price (¥0.1), and the focal product shared the same price as the focal product of ZP. The behavioral results showed a higher purchase rate and a shorter reaction time for ZP in contrast to NP. Neurophysiologically, enlarged LPP amplitude was elicited by ZP relative to NP, suggesting that ZP triggered a stronger positive affect that could motivate decision to buy. Thus, this study provides both behavioral and neural evidence for how different price framing information is processed and ultimately gives rise to price framing effect in purchase decision making. PMID:29731705
Oil price fluctuations and Singapore economy

International Nuclear Information System (INIS)

Youngho Chang; Joonfong Wong

2003-01-01

This study finds that the impact of an oil price shock on the Singapore economy is marginal. Both impulse response and variance decomposition analysis provide reasonable grounds to believe that the impact only had an insignificant adverse effect on Singapore's gross domestic product (GDP), inflation and unemployment rates. Further analysis on two oil vulnerability measures supports the finding: the declining trend of oil intensity in Singapore since 1989 and the declining shares of the Singapore's expenditure on oil consumption as a percentage of its nominal GDP. This study identifies, however, that the impact of an oil price shock on the Singapore economy should not be considered negligible even though it is small. (Author)
Oil price fluctuations and Singapore economy

International Nuclear Information System (INIS)

Chang Youngho; Wong, Joon Fong

2003-01-01

This study finds that the impact of an oil price shock on the Singapore economy is marginal. Both impulse response and variance decomposition analysis provide reasonable grounds to believe that the impact only had an insignificant adverse effect on Singapore's gross domestic product (GDP), inflation and unemployment rates. Further analysis on two oil vulnerability measures supports the finding: the declining trend of oil intensity in Singapore since 1989 and the declining shares of the Singapore's expenditure on oil consumption as a percentage of its nominal GDP. This study identifies, however, that the impact of an oil price shock on the Singapore economy should not be considered negligible even though it is small
Transparency, price-dependent demand and product variety

OpenAIRE

Gu, Yiquan; Wenzel, Tobias

2010-01-01

This paper revisits the relationship between transparency on the consumer side and product variety as analyzed in Schultz (2009). We identify two welfare effects of transparency. More transparency decreases price-cost margins which is beneficial forwelfare. On the other hand, more transparency reduces variety which can be positive or negative for welfare. Overall, more transparency is always welfareimproving.
Cooperative consumers in a deregulated electricity market - dynamic consumption strategies and price coordination

Energy Technology Data Exchange (ETDEWEB)

Haemaelaeinen, R.P.; Maentysaari, J. [Helsinki Univ. of Technology (Finland). Systems Analysis Lab.; Ruusunen, J. [Fortum Power and Heat Inc. (Finland); Pineau, P.O. [Helsinki Univ. of Technology (Finland). Systems Analysis Lab.; Ecole des Hautes Etudes Commerciales, Monteal , Quebec (Canada)

2000-09-01

As the trend in electricity markets is strongly towards deregulation, new players, new rules and new behaviors will continue to emerge. One of the new developments on the demand side is purchases made by a coalition of consumers. It seems indeed likely that in the future this will be more common, and that coalitions of consumers will emerge when they are worthwhile. The aim of this paper is to study how such an organization of consumers can be set up in a hierarchical framework. This new approach has not been described before in the deregulated electricity markets but is clearly an important research topic. We focus our interest on electric space heating, which is an energy need especially important in the Nordic countries such as Finland. We examine the consumption strategies of individual electricity buyers within a coalition. The decision problem all consumers face is to find the optimal use of their space heating system with respect to changes in electricity prices and to their tolerance to indoor temperature variation. A mathematical model for this problem is defined. Physical parameters of sample houses were gathered from an experimental field test conducted in Helsinki during the winter of 1996. The coalition buys in the market at marginal cost. However, as marginal cost pricing may not always fulfill metering and communication needs of the members of the coalition, we consider Time-Of-Use (TOU) pricing within the coalition. Different groups of consumer behavior are constructed to simulate this coalition. The optimal marginal price is used as a reference point to estimate the nearest TOU price within the coalition. (author)
Estimating deficit probabilities with price-responsive demand in contract-based electricity markets

International Nuclear Information System (INIS)

Galetovic, Alexander; Munoz, Cristian M.

2009-01-01

Studies that estimate deficit probabilities in hydrothermal systems have generally ignored the response of demand to changing prices, in the belief that such response is largely irrelevant. We show that ignoring the response of demand to prices can lead to substantial over or under estimation of the probability of an energy deficit. To make our point we present an estimation of deficit probabilities in Chile's Central Interconnected System between 2006 and 2010. This period is characterized by tight supply, fast consumption growth and rising electricity prices. When the response of demand to rising prices is acknowledged, forecasted deficit probabilities and marginal costs are shown to be substantially lower
A comparison of cost-based pricing rules for natural gas distribution utilities

International Nuclear Information System (INIS)

Klein, C.C.

1993-01-01

Partial-equilibrium social welfare deadweight losses under uniform Ramsey pricing, a cost allocation pricing method, and the actual average revenues by customer class for two natural gas distribution utilities are calculated and compared. Marginal cost estimates are derived from a multiple-output translog variable cost function and used, along with three sets of demand elasticities, to generate the Ramsey prices and welfare losses. The actual and cost-allocation prices are taken directly from rate case files. The largest social welfare losses are associated with the cost-allocation rule, as high as 10-25% of revenue, despite suggestions in the literature to the contrary. (Author)
FAKTOR-FAKTOR YANG MEMPENGARUHI MARGIN PEMASARAN SAPI POTONG DAN DAGING SAPI DI KABUPATEN ACEH BESAR

Directory of Open Access Journals (Sweden)

Hendra Koesmara

2015-02-01

Full Text Available This research identified the forms of share market, to calculate the price received by farmers and middlemen, and analyze marketing margins of beef cattle market. This research was conducted in June to August 2011, in Aceh Besar regency of Aceh province. The method used in this study was a survey method and field direct observations and interviews using questionnaires to farmers, middlemen (mugge and meat traders respondent. The number of samples were 420 respondents, including 270 respondents of livestock farmers,105 respondents of middlemen (mugee and 45 respondents of meat traders (final consumerfrom the three districts. This study used regression analysis to determine the effect of variables simultaneously observed the marketing margin. The results showed there were 2 channel marketings, channel marketing I of farmers to the final consumer through two market participants were mugee and meat traders,while the marketing channel II from farmers to consumers through one market participants that was meat traders. In marketing channels I mugee get income share 24.89% with 10.38% share of the cost, while the meat traders got incomeshare 47.70% with 17.03% share of the cost. In marketing channels II meat tradersgot income share 83.00% with17.00% share of the cost. In marketing channels I mugee marketing margin of Rp1,026,293.10/head and the meat traders of Rp1,883,045.98/head, while the meat traders of Rp2,944,838.00/head. The coefficient ofdetermination (R2 equalto 0.337321, which means cattle marketing margin could be explained jointly by 33.73% by the marketing costs, the price at the farmer level and the number of middlemen. The test results of the marketing costs (x1 significantly (P<0.05 on the marketing margin, the price at the farmer level (x2 was highly significant (P<0.01 on the marketing margin and the number of middlemen (x3 didnot affect the marketing margin. (Keywords: Cattle, District of Aceh Besar, Market share
Report of the Select Committee on Petroleum Product Pricing

International Nuclear Information System (INIS)

Dooks, B.

2004-01-01

An all-party Committee of the House of Legislative Assembly of Nova Scotia was established to investigate the pricing of petroleum products such as gasoline and home heating fuel. The Committee conducted public hearings in Halifax, Yarmouth, Bridgewater, Sydney, and Truro, in order to seek input from consumers, producers, suppliers and operators. The mandate of the Select Committee on Petroleum Product Pricing was to investigate the supply and pricing of fuels, including gasoline and home heating oil and to determine whether current prices are justified and fair. This investigation included an examination of the reasons for the current level of product prices; product supply; reasons for volatility in product prices; the rationale for differences in prices across different regions of the province; factors that affect the viability of low volume outlets in the rural and urban marketplace; factors that affect the viability of independent retail operators in the province; and, any evidence of predatory pricing practices at the wholesale and retail levels of the market. The Select Committee also made recommendations related to fair and reasonable product prices at the consumer level, retail and wholesale margins, as well as other actions that may be required to correct imbalances in the distribution and sales of these products to consumers in the province. 8 appendices
Middle distillate price monitoring system. Interim validation report. [No. 2 heating oil

Energy Technology Data Exchange (ETDEWEB)

Hopelain, D.G.; Freedman, D.; Rice, T.H.; Veitch, J.G.; Finlay, A.

1978-12-01

The Middle Distillate Price Monitoring System collects data on prices and gross margins for No. 2 heating oil from a sample of refiners, resellers, and retailers. The data is used to evaluate the level of competition and the reasonableness of prices in the heating oil market. It is concluded that the data does not provide a basis for determining whether a market is competitive, and that there is serious doubt as to the accuracy of the information collected by the system. Some recommendations are given for improving the quality of the information. (DLC)
Pricing of medical devices under coverage uncertainty--a modelling approach.

Science.gov (United States)

Girling, Alan J; Lilford, Richard J; Young, Terry P

2012-12-01

Product vendors and manufacturers are increasingly aware that purchasers of health care will fund new clinical treatments only if they are perceived to deliver value-for-money. This influences companies' internal commercial decisions, including the price they set for their products. Other things being equal, there is a price threshold, which is the maximum price at which the device will be funded and which, if its value were known, would play a central role in price determination. This paper examines the problem of pricing a medical device from the vendor's point of view in the presence of uncertainty about what the price threshold will be. A formal solution is obtained by maximising the expected value of the net revenue function, assuming a Bayesian prior distribution for the price threshold. A least admissible price is identified. The model can also be used as a tool for analysing proposed pricing policies when no formal prior specification of uncertainty is available. Copyright © 2011 John Wiley & Sons, Ltd.
Recent Global Food Price Shocks: Causes, Consequences and Lessons for African Governments and Donors-super- †

OpenAIRE

Philip Abbott; Adeline Borot de Battisti

2011-01-01

Dramatic increases in international agricultural commodity prices began in 2006 and peaked in July 2008. An equally remarkable and rapid decline of those prices then ensued, accompanied by extreme volatility in those prices. The trend in food prices lagged the rapid increases in other commodity prices, including oil and metals, but accompanied those other prices in the downward part of the cycle. Not all agricultural commodities increased to the same extent—grains and oilseed prices increased...
Price determination for hydrogen produced from bio-ethanol in Argentina

International Nuclear Information System (INIS)

Gregorini, V.A.; Pasquevich, D.; Laborde, M.

2010-01-01

A massive penetration for hydrogen as a fuel vector requires a price reduction against fossil fuels (up to lower or at less equal to current prices). That is why it is important to calculate the current prices, so that we can determinate the gap between them and work in reducing them. In order to follow properly prices evolution it is necessary been able to compare data generated by Universities, Laboratories and Industries. So that, DOE creates in 2003 a tool (H2A) to determine prices for hydrogen, with some assumptions and pre defined values, to facilitate transparency and consistency of data. In this work we will use the H2A tool to calculate de price of hydrogen produced in a bio-ethanol semi-industrial Plant in Argentina, and we will compare it with the prices of USA studies. (author)
Petroleum products price interactions on the world markets: an econometric analysis

International Nuclear Information System (INIS)

Maack, Laetitia de; Lantz, Frederic

2012-09-01

This study examines the relationship between crude oil and petroleum products prices in the European, Asian and North American markets. We develop an econometric model, based on the long term equilibrium between the prices, which takes into account the changes in the oil product demand trends. We explain price behaviors by the impact of the demand trends. Because the refining industry which transforms crude into petroleum products is a joint product industry, petroleum product pricing is affected by demand trends both in terms of quality and quantity. Consequently, the long term equilibrium between prices, estimated through a co-integration approach, are affected by several structural breaks. We also develop a panel econometric model which simultaneously takes into account the relative prices of ail world products towards one crude. Finally, the different results are compared to the marginal costs derived from an oil refining optimization model. This econometric modeling approach enables a better understanding of the long term equilibrium between prices of petroleum products and crude. (authors)
Locational Pricing to Mitigate Voltage Problems Caused by High PV Penetration

OpenAIRE

Sam Weckx; Reinhilde D'hulst; Johan Driesen

2015-01-01

In this paper, a locational marginal pricing algorithm is proposed to control the voltage in unbalanced distribution grids. The increasing amount of photovoltaic (PV) generation installed in the grid may cause the voltage to rise to unacceptable levels during periods of low consumption. With locational prices, the distribution system operator can steer the reactive power consumption and active power curtailment of PV panels to guarantee a safe network operation. Flexible loads also respond to...

Price-Cost Ratios in Higher Education: Subsidy Structure and Policy Implications

Science.gov (United States)

Xie, Yan

2010-01-01

The diversity of US institutions of higher education is manifested in many ways. This study looks at that diversity from the economic perspective by studying the subsidy structure through the distribution of institutional price-cost ratio (PCR), defined as the sum of net tuition price divided by total supplier cost and equals to one minus…
Three essays on pricing and risk management in electricity markets

Science.gov (United States)

Kotsan, Serhiy

2005-07-01

A set of three papers forms this dissertation. In the first paper I analyze an electricity market that does not clear. The system operator satisfies fixed demand at a fixed price, and attempts to minimize "cost" as indicated by independent generators' supply bids. No equilibrium exists in this situation, and the operator lacks information sufficient to minimize actual cost. As a remedy, we propose a simple efficient tax mechanism. With the tax, Nash equilibrium bids still diverge from marginal cost but nonetheless provide sufficient information to minimize actual cost, regardless of the tax rate or number of generators. The second paper examines a price mechanism with one price assigned for each level of bundled real and reactive power. Equilibrium allocation under this pricing approach raises system efficiency via better allocation of the reactive power reserves, neglected in the traditional pricing approach. Pricing reactive power should be considered in the bundle with real power since its cost is highly dependent on real power output. The efficiency of pricing approach is shown in the general case, and tested on the 30-bus IEEE network with piecewise linear cost functions of the generators. Finally the third paper addresses the problem of optimal investment in generation based on mean-variance portfolio analysis. It is assumed the investor can freely create a portfolio of shares in generation located on buses of the electrical network. Investors are risk averse, and seek to minimize the variance of the weighted average Locational Marginal Price (LMP) in their portfolio, and to maximize its expected value. I conduct simulations using a standard IEEE 68-bus network that resembles the New York - New England system and calculate LMPs in accordance with the PJM methodology for a fully optimal AC power flow solution. Results indicate that the network topology is a crucial determinant of the investment decision as line congestion makes it difficult to deliver power to
PRICING OF BT COTTON SEEDS IN INDIA: THE DEBATE BEHIND

Directory of Open Access Journals (Sweden)

Anchal ARORA

2014-11-01

Full Text Available In 2006 the state government of Andhra Pradesh reduced the Bt cotton seed prices from Indian Rs1600 to Rs750 in order to make the technology affordable and accessible to small and marginal farmers in the state and also to prevent the monopolistic market structure in the seed market. The drastic reduction in seed prices, on the other hand could affect the profitability of seed providing companies and curb their incentives to innovate in future. Recent literature has also examined the impact of price controls on diffusion of technology, revenue and profitability of seed providers. It suggests that price controls have positively impacted the diffusion of technology in India, and were also successful in increasing the revenue of seed providers in the short run. However, the impact of price controls on profitability would depend on cost conditions. In the light of the above discussion, this article attempts to discuss the debate behind price controls and draws certain policy implications pertaining to pricing of Bt seeds, which has an international policy relevance.
Understanding gasoline pricing in Canada

International Nuclear Information System (INIS)

Anon.

2001-01-01

Pricing policies for gasoline by Canadian oil companies are discussed. An attempt is made to demonstrate that competition between oil companies is extremely keen, and markups are so small that to stay in business, retail outlets have to sell huge volumes and sell non-fuel products, as a means to increase revenues and margins. An explanation is provided for why gasoline prices move in unison, and why what appears to the public as collusion and gouging is, in fact, the result of retail dealers attempting to stay in business. The high prices are attributed mainly to taxes by municipalities, the provinces and the federal government; taxes are said to account for 40 to 50 per cent of the pump price. The cost of crude makes up another 35 to 45 per cent, refining adds 10 to 15 per cent, with the remaining 5 to 10 per cent representing retail costs. (Taxes in the United States average 20 to 30 per cent). Over the longer term, gasoline prices consistently reflect the cost of crude oil, dominated by the OPEC countries which supply about 41 per cent of daily world production. Another factor is the rise of global and regional commodity markets for refined products such as gasoline. Commodity traders buy wholesale gasoline cheaply whenever it is in oversupply, and sell it for a profit into markets where the demand is greater. While this is claimed to ensure competitive prices in all markets, the practice can also trigger abrupt changes in regional markets
Efficient dynamic scarcity pricing in urban water supply

Science.gov (United States)

Lopez-Nicolas, Antonio; Pulido-Velazquez, Manuel; Rougé, Charles; Harou, Julien J.; Escriva-Bou, Alvar

2017-04-01

Water pricing is a key instrument for water demand management. Despite the variety of existing strategies for urban water pricing, urban water rates are often far from reflecting the real value of the resource, which increases with water scarcity. Current water rates do not bring any incentive to reduce water use in water scarcity periods, since they do not send any signal to the users of water scarcity. In California, the recent drought has spurred the implementation of drought surcharges and penalties to reduce residential water use, although it is not a common practice yet. In Europe, the EU Water Framework Directive calls for the implementation of new pricing policies that assure the contribution of water users to the recovery of the cost of water services (financial instrument) while providing adequate incentives for an efficient use of water (economic instrument). Not only financial costs should be recovered but also environmental and resource (opportunity) costs. A dynamic pricing policy is efficient if the prices charged correspond to the marginal economic value of water, which increases with water scarcity and is determined by the value of water for all alternative uses in the basin. Therefore, in the absence of efficient water markets, measuring the opportunity costs of scarce water can only be achieved through an integrated basin-wide hydroeconomic simulation approach. The objective of this work is to design a dynamic water rate for urban water supply accounting for the seasonal marginal value of water in the basin, related to water scarcity. The dynamic pricing policy would send to the users a signal of the economic value of the resource when water is scarce, therefore promoting more efficient water use. The water rate is also designed to simultaneously meet the expected basic requirements for water tariffs: revenue sufficiency (cost recovery) and neutrality, equity and affordability, simplicity and efficiency. A dynamic increasing block rate (IBR
The role of the margins in ice stream dynamics

Science.gov (United States)

Echelmeyer, Keith; Harrison, William

1993-07-01

At first glance, it would appear that the bed of the active ice stream plays a much more important role in the overall force balance than do the margins, especially because the ratio of the half-width to depth for a typical ice stream is large (15:1 to 50:1). On the other hand, recent observations indicate that at least part of the ice stream is underlain by a layer of very weak till (shear strength about 2 kPa), and this weak basal layer would then imply that some or all of the resistive drag is transferred to the margins. In order to address this question, a detailed velocity profile near Upstream B Camp, which extends from the center of the ice stream, across the chaotic shear margin, and onto the Unicorn, which is part of the slow-moving ice sheet was measured. Comparison of this observed velocity profile with finite-element models of flow shows several interesting features. First, the shear stress at the margin is on the order of 130 kPa, while the mean value along the bed is about 15 kPa. Integration of these stresses along the boundaries indicates that the margins provide 40 to 50 percent, and the bed, 60 to 40 percent of the total resistive drag needed to balance the gravitational driving stress in this region. (The range of values represents calculations for different values of surface slope.) Second, the mean basal stress predicted by the models shows that the entire bed cannot be blanketed by the weak till observed beneath upstream B - instead there must be a distribution of weak till and 'sticky spots' (e.g., 85 percent till and 15 percent sticky spots of resistive stress equal to 100 kPa). If more of the bed were composed of weak till, then the modeled velocity would not match that observed. Third, the ice must exhibit an increasing enhancement factor as the margins are approached (E equals 10 in the chaotic zone), in keeping with laboratory measurements on ice under prolonged shear strain. Also, there is either a narrow zone of somewhat stiffer ice (E
An illustrative note on the system price effect of wind and solar power. The German case

Energy Technology Data Exchange (ETDEWEB)

Jaegemann, Cosima

2014-07-15

Exposing wind and solar power to the market price signal allows for cost-efficient investment decisions, as it incentivizes investors to account for the marginal value (MV{sup el}) of renewable energy technologies. As shown by Lamont (2008), the MV{sup el} of wind and solar power units depends on their penetration level. More specifically, the MV el of wind and solar power units is a function of the respective unit's capacity factor and the covariance between its generation profile and the system marginal costs. The latter component of the MV{sup el} (i.e., the covariance) is found to decline as the wind and solar power penetration increases, displacing dispatchable power plants with higher short-run marginal costs of power production and thus reducing the system marginal costs in all generation hours. This so called 'system price effect' is analyzed in more detail in this paper. The analysis complements the work Lamont (2008) in two regards. First of all, an alternative expression for the MV{sup el} of wind and solar power units is derived, which shows that the MV{sup el} of fluctuating renewable energy technologies depends not only on their own penetration level but also on a variety of other parameters that are specific to the electricity system. Second, based on historical wholesale prices and wind and solar power generation data for Germany, a numerical 'ceteris paribus' example for Germany is presented which illustrates that the system price effect is already highly relevant for both wind and solar power generation in Germany.
An illustrative note on the system price effect of wind and solar power. The German case

International Nuclear Information System (INIS)

Jaegemann, Cosima

2014-01-01

Exposing wind and solar power to the market price signal allows for cost-efficient investment decisions, as it incentivizes investors to account for the marginal value (MV el ) of renewable energy technologies. As shown by Lamont (2008), the MV el of wind and solar power units depends on their penetration level. More specifically, the MV el of wind and solar power units is a function of the respective unit's capacity factor and the covariance between its generation profile and the system marginal costs. The latter component of the MV el (i.e., the covariance) is found to decline as the wind and solar power penetration increases, displacing dispatchable power plants with higher short-run marginal costs of power production and thus reducing the system marginal costs in all generation hours. This so called 'system price effect' is analyzed in more detail in this paper. The analysis complements the work Lamont (2008) in two regards. First of all, an alternative expression for the MV el of wind and solar power units is derived, which shows that the MV el of fluctuating renewable energy technologies depends not only on their own penetration level but also on a variety of other parameters that are specific to the electricity system. Second, based on historical wholesale prices and wind and solar power generation data for Germany, a numerical 'ceteris paribus' example for Germany is presented which illustrates that the system price effect is already highly relevant for both wind and solar power generation in Germany.
Relief for marginal wells is better than energy tax

International Nuclear Information System (INIS)

Swords, J.; Wilson, D.

1993-01-01

By increasing production costs and reducing petroleum prices, President Bill Clinton's proposed energy tax would increase marginal well abandonments and hasten the decline of the US oil and gas industry. Instead, the US needs tax law changes to help counteract the increasing number of oil and gas well abandonments in the lower 48 states. The proposed tax would create potential difficulties, while three incentives could be introduced to reduce abandonments and at the same time preserve US government tax revenues that otherwise would be lost. Eliminating the net income limitation on percentage depletion allowances on wells that would otherwise be abandoned would be a great help for marginal well operators. Extended enhanced oil recovery (EOR) credits and broader investment tax credits could also serve the dual purpose of keeping marginal wells operating longer and generating more federal tax revenues. A marginal well investment tax credit should be provided that is not just a credit for incremented investments that exceed investment in prior years. An investment tax credit based on out-of-pocket costs of production, targeted for marginal wells, would be an important incentive to invest in, and continue to maintain, these properties. (author)
Setting Offer Prices by Housing Developers - Selected Issues in the Light of Literature Review

Directory of Open Access Journals (Sweden)

Dittmann Iwona

2015-02-01

Full Text Available This paper deals with selected theoretical issues pertaining to the setting of asking prices by housing developers. Determinants of the buyer’s and seller’s reservation prices have been identified. The advantages and disadvantages, in terms of behavioral economics, of the pricing strategies practiced by housing developers have been indicated. The strategy based on fixing an asking price roughly equal to the estimated market value of the property was compared with the strategy based on offering an inflated asking price (with the assumption of price negotiations. A second comparison concerned the strategy of price disclosure compared with the strategy of price non-disclosure.
Price Formation of Dry Bulk Carriers in the Chinese Shipbuilding Industry

DEFF Research Database (Denmark)

JIANG, Liping

In this paper we present, for the first time, the price formation of China’s dry bulk carrier using vessel prices quoted by major Chinese shipyards in actual shipbuilding orders. This allows us to investigate the relationship of price and determinants in the Chinese shipbuilding industry by inclu......In this paper we present, for the first time, the price formation of China’s dry bulk carrier using vessel prices quoted by major Chinese shipyards in actual shipbuilding orders. This allows us to investigate the relationship of price and determinants in the Chinese shipbuilding industry...... by including generic market factors as well as Chinese elements. The analysis, employing Principal Component Regression (PCR) approach, indicates that the time charter rate has the most significantly positive impact. While increases in other four factors, namely shipbuilding cost, price cost margin...... to investigate what would happen to the Chinese dry bulk carrier prices under changes of time charter rate and shipbuilding cost. This paper has implications for the Chinese shipyards, shipbuilding industry customers and industry policy makers....
Evaluation of the energy component in the main grid tariff and the use of marginal loss rates; Evaluering av energileddet i sentralnettstariffen og bruk av marginaltapssatser

Energy Technology Data Exchange (ETDEWEB)

Bjoerndal, Endre; Bjoerndal, Mette

2010-11-15

In this report, we make an evaluation of the energy component of the central grid tariff and the use of marginal loss rates. We will first review the theory of optimum transmission tariffs and describes how the marginal loss rates are calculated and how these are used in combination with the system price in the current transmission costs. We describe the trend in the Swedish marginal loss schedule, and we refer the very short development in the PJM area (U.S. east coast). As the Swedish and the Norwegian system is apparently based on the same principles, we problematize the lack of harmonization, since the systems actually are now very different. There is little doubt that Statnett has refined and improved methods for calculating the marginal loss rates, while ensuring that bottlenecks are still handled fairly easy by a few large price areas on Nord Pool Spot. We discuss the relationship between loss-tariff and congestion management, and we recommend that Statnett considering using the area price as the settlement price. This will make it much easier for operators to take account of losses. (Author)
Trends in prices to commercial energy consumers in the competitive Texas electricity market

International Nuclear Information System (INIS)

Zarnikau, Jay; Fox, Marilyn; Smolen, Paul

2007-01-01

To date, the price of electricity to commercial or business energy consumers has generally increased at greater rates in the areas of Texas where retail competition has been introduced than in areas that do not enjoy competition. Trends in commercial competitive prices have largely mirrored trends in residential prices. Market restructuring has tended to increase the sensitivity of retail electricity prices to changes in the price of natural gas, the marginal fuel used for generation in Texas. Consequently, the rapid increases in the commodity price of natural gas following restructuring led to increases in competitive electric rates which exceeded the increases in areas not exposed to restructuring, where the fuel component of electric rates tend to reflect a weighted average of the utilities' fuel costs. There is some evidence that pricing behavior by competitive retailers changed when the retailers affiliated with the incumbent utilities were permitted some pricing flexibility, resulting in a reduction in prices. (author)
Pricing strategies in inelastic energy markets : can we use less if we can’t extract more?

NARCIS (Netherlands)

Voinov, A.; Filatova, Tatiana

2014-01-01

Limited supply of nonrenewable energy resources under growing energy demand creates a situation when a marginal change in the quantity supplied or demanded causes non-marginal swings in price levels. The situation is worsened by the fact that we are currently running out of cheap energy resources at
Electricity market price volatility: The case of Ontario

International Nuclear Information System (INIS)

Zareipour, Hamidreza; Bhattacharya, Kankar; Canizares, Claudio A.

2007-01-01

Price volatility analysis has been reported in the literature for most competitive electricity markets around the world. However, no studies have been published yet that quantify price volatility in the Ontario electricity market, which is the focus of the present paper. In this paper, a comparative volatility analysis is conducted for the Ontario market and its neighboring electricity markets. Volatility indices are developed based on historical volatility and price velocity concepts, previously applied to other electricity market prices, and employed in the present work. The analysis is carried out in two scenarios: in the first scenario, the volatility indices are determined for the entire price time series. In the second scenario, the price time series are broken up into 24 time series for each of the 24 h and volatility indices are calculated for each specific hour separately. The volatility indices are also applied to the locational marginal prices of several pricing points in the New England, New York, and PJM electricity markets. The outcomes reveal that price volatility is significantly higher in Ontario than the three studied neighboring electricity markets. Furthermore, comparison of the results of this study with similar findings previously published for 15 other electricity markets demonstrates that the Ontario electricity market is one of the most volatile electricity markets world-wide. This high volatility is argued to be associated with the fact that Ontario is a single-settlement, real-time market
Factors of U.S. Hospitals Associated with Improved Profit Margins: An Observational Study.

Science.gov (United States)

Ly, Dan P; Cutler, David M

2018-02-14

Hospitals face financial pressure from decreased margins from Medicare and Medicaid and lower reimbursement from consolidating insurers. The objectives of this study are to determine whether hospitals that became more profitable increased revenues or decreased costs more and to examine characteristics associated with improved financial performance over time. The design of this study is retrospective analyses of U.S. non-federal acute care hospitals between 2003 and 2013. There are 2824 hospitals as subjects of this study. The main measures of this study are the change in clinical operating margin, change in revenues per bed, and change in expenses per bed between 2003 and 2013. Hospitals that became more profitable had a larger magnitude of increases in revenue per bed (about $113,000 per year [95% confidence interval: $93,132 to $133,401]) than of decreases in costs per bed (about - $10,000 per year [95% confidence interval: - $28,956 to $9617]), largely driven by higher non-Medicare reimbursement. Hospitals that improved their margins were larger or joined a hospital system. Not-for-profit status was associated with increases in operating margin, while rural status and having a larger share of Medicare patients were associated with decreases in operating margin. There was no association between improved hospital profitability and changes in diagnosis related group weight, in number of profitable services, or in payer mix. Hospitals that became more profitable were more likely to increase their admissions per bed per year. Differential price increases have led to improved margins for some hospitals over time. Where significant price increases are not possible, hospitals will have to become more efficient to maintain profitability.
Determinants of the net interest margins in BH banks

Directory of Open Access Journals (Sweden)

Plakalović Novo

2015-01-01

Full Text Available In this paper, the subject of analysis is influence of certain macroeconomic and microeconomic variables on bank net interest margins in Bosnia and Herzegovina (BH for the period from 2008 to 2013 through a multiple linear regression models. The level and dynamics of NIM indicate the efficiency of financial intermediation. The observed period is characterized by the reduction in net interest margins of banks over the previous decade, which was characterized by high GDP growth, bank loans and high-interest rates and high profitability. Therefore, this study examines the factors that affect the level of net interest margins in the domestic banking industry. The main objective of this paper is to determine whether there is interdependence in the movement between the independent and dependent variables through a multiple linear regression. The net interest margin will be observed as a dependent variable, and liquidity risk, operating costs, credit risk, the index of market concentration, funding risk, the growth rate of gross domestic product and consumer price index will be used as independent variables.
Economic forces push down selling prices of U.S. refineries

International Nuclear Information System (INIS)

Anon.

1996-01-01

Recent data on US refinery sales reveal that selling prices have continued to decline in the 1990s. Reasons for this decrease include increased plant investments to meet regulatory requirements, excess refining capacity, increased imports of refined products, and reduced margins. While these expenditures enable a refinery to continue operating, they do not make the refinery more profitable or valuable. Other factors contributing to reduced selling prices of US refineries are: declining local crude production; unstable crude costs; increased energy conservation; growing competition from alternative fuels
Excessive price reduction and extreme volatility in wind dominant electricity markets; solutions and emerging challenges

DEFF Research Database (Denmark)

Farashbashi-Astaneh, Seyed-Mostafa; Chen, Zhe; Mousavi, Omid Alizadeh

2013-01-01

High intermittency in the nature of wind power emphasize conceptual revising in the mechanisms of electricity markets with high wind power penetration levels. This paper introduces overmuch price reduction and high price volatility as two adverse consequences in future wind dominant electricity...... is developed. The paper indicates discriminatory pricing approach can be beneficial in high penetration of wind power because it alleviates high price variations and spikiness in one hand and prevents overmuch price reduction in wind dominant electricity markets on the other hand....... markets. While high price volatility imposes elevated risk levels for both electricity suppliers and consumers, excessive price reduction of electricity is a disincentive for investment in new generation capacity and might jeopardizes system adequacy in long term. A comparative study between marginal...
Industrial pricing in Brazil in the 2010s: The pass-through effect

Directory of Open Access Journals (Sweden)

Felipe Câmara

2017-01-01

Full Text Available The aim of this paper is to discuss the impact of costs on industrial inflation in Brazil. Assuming that inflation is mainly cost-push, this paper estimates the exchange rate pass-through on industrial prices. Based on Kalecki’s price equation, the paper explores data from the producer price index from 2010 onward. One of the main findings is that more than 60% of the inflationary acceleration in the industrial prices can be explained by exchange rate devaluations. The econometric exercise also showed that when demand increases, even if labor unit costs do not change, firms increase their profit margin. Finally, the paper questions the effectiveness of the inflation targeting policy, when the diagnosis to the pressure on prices comes from the costs, and not from demand.

Lend Global, Fund Local? Price and Funding Cost Margins in Multinational Banking

NARCIS (Netherlands)

Galema, R.; Koetter, M.; Liesegang, C.

2016-01-01

In a proposed model of a multinational bank, interest margins determine local lending by foreign affiliates and the internal funding by parent banks. We exploit detailed parent-affiliate-level data of all German banks to empirically test our theoretical predictions in pre-crisis times. Local lending
Estimating the price elasticity of expenditure for prescription drugs in the presence of non-linear price schedules: an illustration from Quebec, Canada.

Science.gov (United States)

Contoyannis, Paul; Hurley, Jeremiah; Grootendorst, Paul; Jeon, Sung-Hee; Tamblyn, Robyn

2005-09-01

The price elasticity of demand for prescription drugs is a crucial parameter of interest in designing pharmaceutical benefit plans. Estimating the elasticity using micro-data, however, is challenging because insurance coverage that includes deductibles, co-insurance provisions and maximum expenditure limits create a non-linear price schedule, making price endogenous (a function of drug consumption). In this paper we exploit an exogenous change in cost-sharing within the Quebec (Canada) public Pharmacare program to estimate the price elasticity of expenditure for drugs using IV methods. This approach corrects for the endogeneity of price and incorporates the concept of a 'rational' consumer who factors into consumption decisions the price they expect to face at the margin given their expected needs. The IV method is adapted from an approach developed in the public finance literature used to estimate income responses to changes in tax schedules. The instrument is based on the price an individual would face under the new cost-sharing policy if their consumption remained at the pre-policy level. Our preferred specification leads to expenditure elasticities that are in the low range of previous estimates (between -0.12 and -0.16). Naïve OLS estimates are between 1 and 4 times these magnitudes. (c) 2005 John Wiley & Sons, Ltd.
Analysis on 'new fundamentals' and range of oil price trend in the long run

Energy Technology Data Exchange (ETDEWEB)

Rui, Chen

2010-09-15

The range of trend of oil price will be decided by marginal production cost of crude oil and production cost of alternative energy consumed as transportation fuel on a large scale. The former factor determines the lower limit and the latter determines the upper limit of oil price. financial factors and the value of USD will not only affect the short-term change of oil price, they may become fundamentals factors that exert influence on the mid-long term change of oil price, namely, New Fundamentals, which will determine the fluctuation degree of oil price in the long run.
Electricity prices in a competitive market: a preliminary analysis of the deregulated Thai electricity industry

International Nuclear Information System (INIS)

Pipattanasomporn, M.; Ongsakul, W.; Pacudan, R.; Lefevre, T.

2000-01-01

The electricity industry throughout the world is currently undergoing a significant transition towards restructuring and deregulation. Following this new legislation, Thailand has initiated an institutional and structural reform with a belief that this could be the best way forward for the Thai electricity supply industry (ESI) to improve efficiency, lower electricity prices, and tackle financial debts. This paper presents an analysis of the extent to which prices for generation services in a competitive market may differ from regulated electricity prices, if competitive prices are based on marginal costs and regulated prices are based on average costs, by using Thailand as a case study. (Author)
Setting Offer Prices by Housing Developers - Selected Issues in the Light of Literature Review

OpenAIRE

Dittmann Iwona

2015-01-01

This paper deals with selected theoretical issues pertaining to the setting of asking prices by housing developers. Determinants of the buyer’s and seller’s reservation prices have been identified. The advantages and disadvantages, in terms of behavioral economics, of the pricing strategies practiced by housing developers have been indicated. The strategy based on fixing an asking price roughly equal to the estimated market value of the property was compared with the strategy based on offerin...
Energy Prices, Tariffs, Taxes and Subsidies in Ukraine

Energy Technology Data Exchange (ETDEWEB)

Evans, Meredydd

2007-04-01

For many years, electricity, gas and district heating tariffs for residential consumers were very low in Ukraine; until recently, they were even lower than in neighbouring countries such as Russia. The increases in gas and electricity tariffs, implemented in 2006, are an important step toward sustainable pricing levels; however, electricity and natural gas (especially for households) are still priced below the long-run marginal cost. The problem seems even more serious in district heating and nuclear power. According to the Ministry of Construction, district heating tariffs, on average, cover about 80% of costs. Current electricity prices do not fully include the capital costs of power stations, which are particularly high for nuclear power. Although the tariff for nuclear electricity generation includes a small decommissioning charge, it has not been sufficient to accumulate necessary funds for nuclear plants decommissioning.
Hospital prices and market structure in the hospital and insurance industries.

Science.gov (United States)

Moriya, Asako S; Vogt, William B; Gaynor, Martin

2010-10-01

There has been substantial consolidation among health insurers and hospitals, recently, raising questions about the effects of this consolidation on the exercise of market power. We analyze the relationship between insurer and hospital market concentration and the prices of hospital services. We use a national US dataset containing transaction prices for health care services for over 11 million privately insured Americans. Using three years of panel data, we estimate how insurer and hospital market concentration are related to hospital prices, while controlling for unobserved market effects. We find that increases in insurance market concentration are significantly associated with decreases in hospital prices, whereas increases in hospital concentration are non-significantly associated with increases in prices. A hypothetical merger between two of five equally sized insurers is estimated to decrease hospital prices by 6.7%.
Stochastic LMP (Locational marginal price) calculation method in distribution systems to minimize loss and emission based on Shapley value and two-point estimate method

International Nuclear Information System (INIS)

Azad-Farsani, Ehsan; Agah, S.M.M.; Askarian-Abyaneh, Hossein; Abedi, Mehrdad; Hosseinian, S.H.

2016-01-01

LMP (Locational marginal price) calculation is a serious impediment in distribution operation when private DG (distributed generation) units are connected to the network. A novel policy is developed in this study to guide distribution company (DISCO) to exert its control over the private units when power loss and green-house gases emissions are minimized. LMP at each DG bus is calculated according to the contribution of the DG to the reduced amount of loss and emission. An iterative algorithm which is based on the Shapley value method is proposed to allocate loss and emission reduction. The proposed algorithm will provide a robust state estimation tool for DISCOs in the next step of operation. The state estimation tool provides the decision maker with the ability to exert its control over private DG units when loss and emission are minimized. Also, a stochastic approach based on the PEM (point estimate method) is employed to capture uncertainty in the market price and load demand. The proposed methodology is applied to a realistic distribution network, and efficiency and accuracy of the method are verified. - Highlights: • Reduction of the loss and emission at the same time. • Fair allocation of loss and emission reduction. • Estimation of the system state using an iterative algorithm. • Ability of DISCOs to control DG units via the proposed policy. • Modeling the uncertainties to calculate the stochastic LMP.
Market based solutions for power pricing

International Nuclear Information System (INIS)

Wangensteen, Ivar

2002-06-01

The report examines how the price for effect reserves, spot market power and regulated power is formed provided ideal market conditions rule. Primarily the price determining factors in a market for power reserves are examined and how the connection between this market and the energy market (the spot market) is. In a free market there would be a balance between what the actors may obtain by operating in the open market for power reserves/regulated power on the one hand and the market for spot power on the other. Primarily we suppose that the desired amount of power reserve is known. Secondly the problem constellation is extended to comprise the size of the effect reserves i.e. the optimising of the requirement to the power reserves. The optimal amount of power reserves is obtained when there is a balance between the cost and the benefit. This optimal balance is achieved when expected macro economical loss due to outfacing balances against the cost of maintaining larger reserves. By using a simple model it is demonstrated that a system operator regulates the maximal price in the regulated market and this equals the rationing price. The actors will offer sufficient reserves even if the reserve price is zero (provided risk neutrality). If the maximal price for regulated power is lower the price of effect reserves will rise. Based on the same simple model calculations are made for how short and long term market balance will be for increasing demands
Renewable energy as a natural gas price hedge: the case of wind

International Nuclear Information System (INIS)

Berry, David

2005-01-01

Electric utilities use natural gas to fuel many of their power plants, especially those plants which provide electricity at peak and intermediate hours. Natural gas prices are highly volatile and have shown a general upward trend. Wind energy can provide a cost-effective hedge against natural gas price volatility or price increases. This conclusion is based on analysis of the costs of marginal conventional generation given the historical probability distribution of natural gas prices, the cost of wind energy, wind integration costs, transmission costs for wind energy, the capacity value of wind, and environmental benefits of wind energy for a hypothetical utility in the Southwestern United States. The efficacy of using wind energy as a hedge at a particular utility will depend on site specific conditions
Locational Pricing to Mitigate Voltage Problems Caused by High PV Penetration

Directory of Open Access Journals (Sweden)

Sam Weckx

2015-05-01

Full Text Available In this paper, a locational marginal pricing algorithm is proposed to control the voltage in unbalanced distribution grids. The increasing amount of photovoltaic (PV generation installed in the grid may cause the voltage to rise to unacceptable levels during periods of low consumption. With locational prices, the distribution system operator can steer the reactive power consumption and active power curtailment of PV panels to guarantee a safe network operation. Flexible loads also respond to these prices. A distributed gradient algorithm automatically defines the locational prices that avoid voltage problems. Using these locational prices results in a minimum cost for the distribution operator to control the voltage. Locational prices can differ between the three phases in unbalanced grids. This is caused by a higher consumption or production in one of the phases compared to the other phases and provides the opportunity for arbitrage, where power is transferred from a phase with a low price to a phase with a high price. The effect of arbitrage is analyzed. The proposed algorithm is applied to an existing three-phase four-wire radial grid. Several simulations with realistic data are performed.
Animal Diet Formulation with Floating Price

Directory of Open Access Journals (Sweden)

S.H Nasseri

2016-12-01

Full Text Available In the process of milk production, the highest cost relates to animal feed. Based on reports provided by the experts, around seventy percent of dairy livestock costs included feed costs. In order to minimize the total price of livestock feed, according to the limits of feed sources in each region or season, and also the transportation and maintenance costs and ultimately milk price reduction, optimization of the livestock nutrition program is an essential issue. Because of the uncertainty and lack of precision in the optimal food ration done with existing methods based on linear programming, there is a need to use appropriate methods to meet this purpose. Therefore, in this study formulation of completely mixed nutrient diets of dairy cows is done by using a fuzzy linear programming in early lactation. Application of fuzzy optimization method and floating price make it possible to formulate and change the completely mixed diets with adequate safety margins. Therefore, applications of fuzzy methods in feed rations of dairy cattle are recommended to optimize the diets. Obviously, it would be useful to design suitable software, which provides the possibility of using floating prices to set feed rations by the use of fuzzy optimization method.
Statistical model for forecasting uranium prices to estimate the nuclear fuel cycle cost

International Nuclear Information System (INIS)

Kim, Sung Ki; Ko, Won Il; Nam, Hyoon; Kim, Chul Min; Chung, Yang Hon; Bang, Sung Sig

2017-01-01

This paper presents a method for forecasting future uranium prices that is used as input data to calculate the uranium cost, which is a rational key cost driver of the nuclear fuel cycle cost. In other words, the statistical autoregressive integrated moving average (ARIMA) model and existing engineering cost estimation method, the so-called escalation rate model, were subjected to a comparative analysis. When the uranium price was forecasted in 2015, the margin of error of the ARIMA model forecasting was calculated and found to be 5.4%, whereas the escalation rate model was found to have a margin of error of 7.32%. Thus, it was verified that the ARIMA model is more suitable than the escalation rate model at decreasing uncertainty in nuclear fuel cycle cost calculation
Statistical model for forecasting uranium prices to estimate the nuclear fuel cycle cost

Energy Technology Data Exchange (ETDEWEB)

Kim, Sung Ki; Ko, Won Il; Nam, Hyoon [Nuclear Fuel Cycle Analysis, Korea Atomic Energy Research Institute, Daejeon (Korea, Republic of); Kim, Chul Min; Chung, Yang Hon; Bang, Sung Sig [Korea Advanced Institute of Science and Technology, Daejeon (Korea, Republic of)

2017-08-15

This paper presents a method for forecasting future uranium prices that is used as input data to calculate the uranium cost, which is a rational key cost driver of the nuclear fuel cycle cost. In other words, the statistical autoregressive integrated moving average (ARIMA) model and existing engineering cost estimation method, the so-called escalation rate model, were subjected to a comparative analysis. When the uranium price was forecasted in 2015, the margin of error of the ARIMA model forecasting was calculated and found to be 5.4%, whereas the escalation rate model was found to have a margin of error of 7.32%. Thus, it was verified that the ARIMA model is more suitable than the escalation rate model at decreasing uncertainty in nuclear fuel cycle cost calculation.
Competitive electricity markets around the world: approaches to price risk management

International Nuclear Information System (INIS)

Masson, G.S.

1999-01-01

This chapter focuses on wholesale electricity markets, and traces the histories of the US and UK power industries. Risk management in the new electricity market is examined covering price risk, location basis risk, volume risk, and margin and cross-commodity risk. Specific competitive market systems that have been implemented around the world including mandatory pools, voluntary pools, and bilateral markets are discussed. Panels describing the functions of ancillary services, electricity price volatility, and the problems of capacity payments and the UK pool are presented
A new division of the Nordic countries into potential price regions

International Nuclear Information System (INIS)

2001-01-01

It has been proposed that the division of the Nordic countries into electric spot regions (potential price regions) should be changed. This implies, among other things, that Sweden is divided into three price regions. The price regions will be used for dealing with large bottlenecks, while small bottlenecks will be handled by means of countertrade. Will the change increase the risk of market power? Probably not. The present arrangement offers about equally good possibilities to exercise market power and causes price signals in general to become erroneous and that trade becomes limited. The absence of price limits in Sweden will probably not increase competition by much since the same producers are numerous on both sides of the limits. Price regions in Sweden may sharpen competition between producers in each region and producers in adjacent regions outside of Sweden
Impacts of Transitioning from Firm Fixed Price to Fixed Price Incentive Firm Target Contracts in PEO Missiles and Space

Science.gov (United States)

2016-09-01

this graph, the Defense Index recognized lower operating margins than S&P indices for capital goods, pharmaceuticals and biotechnology , technical...Research Service. https://www.fas.org/sgp/crs/weapons/RS22942.pdf Frick, D. (2013). Risk in fixed-price contracts. Defense AT&L Magazine . November...Joint_Light_Tactical_Vehicle Kendall, F. (2011). Better Buying Power special issue foreword. Defense AT&L Magazine . September-October 2011. Retrieved from http://www.dau.mil
Crude oil price dynamics: A study on effects of market expectation and strategic supply on price movements

Science.gov (United States)

Jin, Xin

Recent years have seen dramatic fluctuations in crude oil prices. This dissertation attempts to better understand price behavior. The first chapter studies the behavior of crude oil spot and futures prices. Oil prices, particularly spot and short-term futures prices, appear to have switched from I(0) to I(1) in early 2000s. To better understand this apparent change in persistence, a factor model of oil prices is proposed, where the prices are decomposed into long-term and short-term components. The change in the persistence behavior can be explained by changes in the relative volatility of the underlying components. Fitting the model to weekly data on WTI prices, the volatility of the persistent shocks increased substantially relative to other shocks. In addition, the risk premiums in futures prices have changed their signs and become more volatile. The estimated net marginal convenience yield using the model also shows changes in its behavior. These observations suggest that a dramatic fundamental change occurred in the period from 2002 to 2004 in the dynamics of the crude oil market. The second chapter explores the short-run price-inventory dynamics in the presence of different shocks. Classical competitive storage model states that inventory decision considers both current and future market condition, and thus interacts with spot and expected future spot prices. We study competitive storage holding in an equilibrium framework, focusing on the dynamic response of price and inventory to different shocks. We show that news shock generates response profile different from traditional contemporaneous shocks in price and inventory. The model is applied to world crude oil market, where the market expectation is estimated to experience a sharp change in early 2000s, together with a persisting constrained supply relative to demand. The expectation change has limited effect on crude oil spot price though. The world oil market structure has been studied extensively but no
Animal health and price transmission along livestock supply chains.

Science.gov (United States)

Aragrande, M; Canali, M

2017-04-01

Animal health diseases can severely affect the food supply chain by causing variations in prices and market demand. Price transmission analysis reveals in what ways price variations are transmitted along the supply chain, and how supply chains of substitute products and different regional markets are also affected. In perfect markets, a price variation would be completely and instantaneously transmitted across the different levels of the supply chain: producers, the processing industry, retailers and consumers. However, empirical studies show that food markets are often imperfect, with anomalies or asymmetries in price transmission and distortions in the distribution of market benefits. This means, for instance, that a price increase at the consumer level may not be transmitted from retailers to processors and producers; yet, on the other hand, price falls may rapidly affect the upstream supply chain. Market concentration and the consequent exertion of market power in key segments of the supply chain can explain price transmission asymmetries and their distributional effects, but other factors may also be involved, such as transaction costs, scale economies, and imperfect information. During the bovine spongiform encephalopathy (BSE) crisis, asymmetric price transmission in the beef supply chain and related meat markets determined distributional effects among sectors. After the spread of the BSE food scare, the fall in demand marginally affected the price paid to retailers, but producers and wholesalers suffered much more, in both price reductions and the time needed to recover to precrisis demand. Price transmission analysis investigates how animal health crises create different economic burdens for various types of stakeholder, and provides useful socioeconomic insights when used with other tools.
Price Endogeneity and Marginal Cost Effects on Incentive Compatible Stormwater Management Policies

OpenAIRE

Huber, Matthew C.; Willis, David B.; Hayes, John C.; Privette, Charles V., III

2010-01-01

Incentive based stormwater management policies offer the prospect of reducing urban stormwater runoff while increasing developer profits. An incentive compatible Stormwater Banking Program (SBP) is presented that allows developers to build at higher residential densities in exchange for including low impact stormwater Best Management Practices (BMPs) in the development’s stormwater management infrastructure. Price endogeneity presents itself when the smaller residential lots created by buildi...

Marginality and Social Rejection in Amiri Baraka's Slave Ship

Directory of Open Access Journals (Sweden)

Hamid Hammad Abed

2016-11-01

Full Text Available Marginality and social rejection are the most influential matters exploited by Baraka to intentionally criticize the American society. More often than not, these two matters have become the scenes of major or minor acts of humiliation and dehumanization that threaten to violate the ethical rules of living. This paper aims at investigating the impact of marginality and social rejection on a number of black characters in Baraka's Slave Ship who are brought to America to be sold as commodities. It is divided into two sections and conclusion. Section one deals with Amiri Baraka’s dramatic thought and experience of marginality within the American society. The textual analysis of Slave Ship is investigated in section two. The significance of the study lies in its textual exploration of the impact of marginality and social rejection in subverting the American dream of democracy, freedom, and equality in Baraka’s Slave Ship.
PRICE AND PRICING STRATEGIES

OpenAIRE

SUCIU Titus

2013-01-01

In individual companies, price is one significant factor in achieving marketing success. In many purchase situations, price can be of great importance to customers. Marketers must establish pricing strategies that are compatible with the rest of the marketing mix. Management should decide whether to charge the same price to all similar buyers of identical quantities of a product (a one-price strategy) or to set different prices (a flexible price strategy). Many organizations, especially retai...
Price and distribution policies in healthcare marketing in Romania.

Science.gov (United States)

Coculescu, B I; Coculescu, E C; Purcărea, V L

2017-01-01

There is a principle similar to the theory of exchange in the marketing of health services, meaning that what is delivered to the target market (i.e. the beneficiaries) must be equal to or greater than what is to be received (i.e. the price). The price level in the marketing mix is influenced by how the consumer perceives the respective medical service and is quantified in the profit and the turnover of the organization respectively. The cost of the medical act as a whole is the value of all the tangible and intangible variables associated with it, and the planning, distribution and promotion of the product must be taken into account in the price setting.
Quantifying Safety Margin Using the Risk-Informed Safety Margin Characterization (RISMC)

Energy Technology Data Exchange (ETDEWEB)

Grabaskas, David; Bucknor, Matthew; Brunett, Acacia; Nakayama, Marvin

2015-04-26

The Risk-Informed Safety Margin Characterization (RISMC), developed by Idaho National Laboratory as part of the Light-Water Reactor Sustainability Project, utilizes a probabilistic safety margin comparison between a load and capacity distribution, rather than a deterministic comparison between two values, as is usually done in best-estimate plus uncertainty analyses. The goal is to determine the failure probability, or in other words, the probability of the system load equaling or exceeding the system capacity. While this method has been used in pilot studies, there has been little work conducted investigating the statistical significance of the resulting failure probability. In particular, it is difficult to determine how many simulations are necessary to properly characterize the failure probability. This work uses classical (frequentist) statistics and confidence intervals to examine the impact in statistical accuracy when the number of simulations is varied. Two methods are proposed to establish confidence intervals related to the failure probability established using a RISMC analysis. The confidence interval provides information about the statistical accuracy of the method utilized to explore the uncertainty space, and offers a quantitative method to gauge the increase in statistical accuracy due to performing additional simulations.
The impact of wind generation on the electricity spot-market price level and variance: The Texas experience

International Nuclear Information System (INIS)

Woo, C.K.; Horowitz, I.; Moore, J.; Pacheco, A.

2011-01-01

The literature on renewable energy suggests that an increase in intermittent wind generation would reduce the spot electricity market price by displacing high fuel-cost marginal generation. Taking advantage of a large file of Texas-based 15-min data, we show that while rising wind generation does indeed tend to reduce the level of spot prices, it is also likely to enlarge the spot-price variance. The key policy implication is that increasing use of price risk management should accompany expanded deployment of wind generation. - Highlights: → Rising wind generation in ERCOT tends to reduce electricity spot prices. → Rising wind generation in ERCOT is also likely to enlarge the spot-price variance. → Increased price risk management should accompany expanded wind power deployment.
The impact of carbon prices on generation-cycling costs

International Nuclear Information System (INIS)

Denny, Eleanor; O'Malley, Mark

2009-01-01

The introduction of mechanisms aimed at reducing greenhouse gas emissions can have a serious impact on electricity system costs. A carbon mechanism that forces generators to internalise their emissions costs may alter the merit order in which generators are dispatched in the market. Heavy carbon dioxide polluters may switch from operating continuously to having to operate on the margin more often. This results in these units being required to switch on and off and vary their output more frequently, which has a significant impact on their costs. In this paper, the impact of carbon prices on the operating profiles of generators in a real electricity system is investigated. A large number of potential scenarios are considered and it is found that carbon prices significantly increase the cycling costs. These increased cycling costs significantly offset the carbon dioxide reduction benefits of the carbon price
Consumption-based macroeconomic models of asset pricing theory

Directory of Open Access Journals (Sweden)

Đorđević Marija

2016-01-01

Full Text Available The family of consumptionbased asset pricing models yields a stochastic discount factor proportional to the marginal rate of intertemporal substitution of consumption. In examining the empirical performance of this class of models, several puzzles are discovered. In this literature review we present the canonical model, the corresponding empirical tests, and different extensions to this model that propose a resolution of these puzzles.
Business cycles and the behavior of energy prices

OpenAIRE

Serletis, Apostolos; Hulleman, Vaughn

1994-01-01

This paper tests the theory of storage--the hypothesis that the marginal convenience yield on inventory falls at a decreasing rate as inventory increases in energy markets (crude oil, heating oil, and unleaded gas markets). We use the Fama and French (1988) indirect test, based on the relative variation in spot and futures prices. The results suggest that the theory holds for the energy markets.
Evaluation of a rapid LMP-based approach for calculating marginal unit emissions

International Nuclear Information System (INIS)

Rogers, Michelle M.; Wang, Yang; Wang, Caisheng; McElmurry, Shawn P.; Miller, Carol J.

2013-01-01

Graphical abstract: Display Omitted - Highlights: • Pollutant emissions estimated based on locational marginal price and eGRID data. • Stochastic model using IEEE RTS-96 system used to evaluate LMP approach. • Incorporating membership function enhanced reliability of pollutant estimate. • Error in pollutant estimate typically 2 and X and SO 2 . - Abstract: To evaluate the sustainability of systems that draw power from electrical grids there is a need to rapidly and accurately quantify pollutant emissions associated with power generation. Air emissions resulting from electricity generation vary widely among power plants based on the types of fuel consumed, the efficiency of the plant, and the type of pollution control systems in service. To address this need, methods for estimating real-time air emissions from power generation based on locational marginal prices (LMPs) have been developed. Based on LMPs the type of the marginal generating unit can be identified and pollutant emissions are estimated. While conceptually demonstrated, this LMP approach has not been rigorously tested. The purpose of this paper is to (1) improve the LMP method for predicting pollutant emissions and (2) evaluate the reliability of this technique through power system simulations. Previous LMP methods were expanded to include marginal emissions estimates using an LMP Emissions Estimation Method (LEEM). The accuracy of emission estimates was further improved by incorporating a probability distribution function that characterize generator fuel costs and a membership function (MF) capable of accounting for multiple marginal generation units. Emission estimates were compared to those predicted from power flow simulations. The improved LEEM was found to predict the marginal generation type approximately 70% of the time based on typical system conditions (e.g. loads and fuel costs) without the use of a MF. With the addition of a MF, the LEEM was found to provide emission estimates with
Patents and profits: A disparity of manufacturing margins in the tenofovir value chain.

Science.gov (United States)

Walwyn, David

2013-03-01

Registered in 2001, tenofovir disoproxil fumarate (TDF) has quickly become a mainstay of first line regimens for the treatment of HIV. Initially only available in developed countries at a cost of US$5 000 per person per year (ppy), Gilead's Access Programme (GAP) has extended the use of the product to 2.4 million patients in low and middle income countries. The programme has two components: distribution of the branded product at reduced prices and licensing partnerships with generic manufacturers. The licensing partnerships now supply 75% of the market by volume, at a treatment cost of US$57 ppy (1% of the branded cost). From Gilead's perspective, GAP must be considered a huge success. It has enabled the company to maintain high prices in developed countries whilst reducing its input costs and deflecting criticism of its failure to provide essential medicines for the poor, hence risking the possibility of compulsory licensing. Over the period 2001 to 2011, TDF in its various forms has generated for Gilead more than US$31 billion revenue at a gross margin of 80%, equivalent to a gross profit of US$25 billion. Analysis of the TDF value chain, from preparation of the active pharmaceutical ingredient (API) to sale of the formulated product, shows that manufacturing margins are highly skewed in favour of the originator, with the latter's profit being US$3.2 billion vs. US$4 million for API manufacturers and US$39 million for formulators (2011). The data argues for a more rational approach to drug pricing including possible regulation in developed countries and more sustainable margins for the generic producers.
Natural gas, NGL's and crude: supply, demand and price forecasts

International Nuclear Information System (INIS)

Stauft, T.L.

2003-01-01

This paper presents an overview of the major issues to watch in the crude oil, natural gas, and natural gas liquids (NGL) markets in North America. The presentation began with background information concerning Purvin and Gertz, an employee-owned consulting firm whose employees are chemical engineers, holders of a Master of Business Administration (MBA), or economists. They specialize in providing strategic, commercial, and technical advice to the international energy industry. A closer look at each individual market was provided, looking at demand, supply, price drivers and others. The author concluded that world oil prices continue to be influenced by a war premium. Oil prices support natural gas, as well as the possibility of a supply issue. The gas processing margins have remained strong. The unknown quantities are the weather and economic recovery. figs
[The price-based certainty of purchase influences consumer behavior for discount].

Science.gov (United States)

Arihara, Katsuhiko; Ariga, Atsunori; Furuya, Takeshi

2016-04-01

Tversky & Kahneman (1981) reported that most participants decided to drive when they could save money on a low-price good as compared to when they could save on a high-price good, even though the discount prices were same. Although this irrational decision making has been interpreted as a rate-dependent estimation of value (prospect theory), this study newly proposes that it can be explained by the certainty of purchase based on the price of goods. Experiment 1 replicated the previously reported difference in decision making, and additionally demonstrated that participants' certainty of purchase was lower for a high- than a low-price good. When it was emphasized that participants' intention to purchase high- and low-price goods were equally sure, decision making did not significantly differ (Experiment 2). Furthermore, decision making differed based only on the certainty of purchase even,when prices of goods were-same (Experiment 3). Consumers' decision making may be rather rational, depending straightforwardly on the certainty of purchase that is susceptible to price.
Natural gas tariffing principles for non-eligible consumers

International Nuclear Information System (INIS)

2005-01-01

This document explains the main principles and control means of natural gas tariffing in France for non-eligible consumers: marginal cost tariffing and equal terms between consumers, prices control regime and public utility contract between the Government and Gaz de France company for the smoothing of the strong volatility of petroleum products price, successive increase of prices due to import tariffs. The evolution of prices between 1998 and today are summarized in tables and graphs. (J.S.)
Prices and Price Setting

NARCIS (Netherlands)

R.P. Faber (Riemer)

2010-01-01

textabstractThis thesis studies price data and tries to unravel the underlying economic processes of why firms have chosen these prices. It focuses on three aspects of price setting. First, it studies whether the existence of a suggested price has a coordinating effect on the prices of firms.
Deference or Interrogation? Contrasting Models for Reconciling Religion, Gender and Equality

Directory of Open Access Journals (Sweden)

Moira Dustin

2012-01-01

Full Text Available Abstract Since the late 1990s, the extension of the equality framework in the United Kingdom has been accompanied by the recognition of religion within that framework and new measures to address religious discrimination. This development has been contested, with many arguing that religion is substantively different to other discrimination grounds and that increased protection against religious discrimination may undermine equality for other marginalized groups – in particular, women and lesbian, gay, bisexual and transgender (LGBT people. This paper considers these concerns from the perspective of minoritized women in the UK. It analyses two theoretical approaches to reconciling religious claims with gender equality – one based on privileging, the other based on challenging religious claims – before considering which, if either, reflects experiences in the UK in recent years and what this means for gender equality.
Relationship between the Uncompensated Price Elasticity and the Income Elasticity of Demand under Conditions of Additive Preferences.

Science.gov (United States)

Sabatelli, Lorenzo

2016-01-01

Income and price elasticity of demand quantify the responsiveness of markets to changes in income and in prices, respectively. Under the assumptions of utility maximization and preference independence (additive preferences), mathematical relationships between income elasticity values and the uncompensated own and cross price elasticity of demand are here derived using the differential approach to demand analysis. Key parameters are: the elasticity of the marginal utility of income, and the average budget share. The proposed method can be used to forecast the direct and indirect impact of price changes and of financial instruments of policy using available estimates of the income elasticity of demand.
EU emission trading scheme and the effect on the price of electricity

International Nuclear Information System (INIS)

2004-01-01

The Electricity Market Working Group and the Climate Change Policy Working Group of the Nordic Council of Ministers, has commissioned ECON Analysis to prepare this report. The report analyses the demand and supply of GHG emission allowances and the price of emission allowances for the period 2005-2007 and 2008-2012 and the effect on the electricity price in the Nordic electricity market. The demand for emissions allowances has then been estimated for different scenarios, with different assumption on burden sharing between sectors and international participation and the supply of emission allowances is determined by the marginal abatement costs. Based on available information on abatement costs the supply of allowances is then estimated. The market balance between the demand and supply for allowances then determines the price of emission allowances. The effect on the electricity price is simulated with ECON's model for the Nordic power market to quantitatively estimate the effect from emissions trading on the electricity price, production, consumption, trade, etc. (BA)
Day-Ahead Congestion Management in Distribution Systems through Household Demand Response and Distribution Congestion Prices

DEFF Research Database (Denmark)

Liu, Weijia; Wu, Qiuwei; Wen, Fushuan

2014-01-01

into balancing power might challenge the operation of electric distribution systems and cause congestions. This paper presents a distribution congestion price (DCP) based market mechanism to alleviate possible distribution system congestions. By employing the loca- tional marginal pricing (LMP) model...... is proposed. Finally, a practical Danish 60kV/10.5kV distribution system is employed as the test case to verify the proposed method for mitigating congestion....
Business cycles and the behavior of energy prices

Energy Technology Data Exchange (ETDEWEB)

Serletis, A.; Hulleman, V. [Univ. of Calgary, Alberta (Canada)

1994-12-31

This paper tests the theory of storage - the hypothesis that the marginal convenience yield on inventory falls at a decreasing rate as inventory increases in energy markets (crude oil, heating oil, and unleaded gas markets). We use the Fama and French (1988) indirect test, based on the relative variation in spot and futures prices. The results suggest that the theory holds for the energy markets. 11 refs., 4 tabs.
Dynamic impacts of high oil prices on the bioethanol and feedstock markets

International Nuclear Information System (INIS)

Cha, Kyung Soo; Bae, Jeong Hwan

2011-01-01

This study investigates the impacts of high international oil prices on the bioethanol and corn markets in the US. Between 2007 and 2008, the prices of major grain crops had increased sharply, reflecting the rise in international oil prices. These dual price shocks had caused substantial harm to the global economy. Employing a structural vector auto-regression model (SVAR), we analyze how increases in international oil prices could impact the prices of and demand for corn, which is used as a major bioethanol feedstock in the US. The results indicate that an increase in the oil price would increase bioethanol demand for corn and corn prices in the short run and that corn prices would stabilize in the long run as corn exports and feedstock demand for corn decline. Consequently, policies supporting biofuels should encourage the use of bioethanol co-products for feed and the development of marginal land to mitigate increases in the feedstock price. - Research highlights: → World economy experienced 'dual shocks', which were caused by skyrocketed oil prices and grain prices between 2007 and 2008. → Sharp increases in ethanol production in response to high oil prices were considered as a major driving force to 'ag-flation' in the United States. → Applying a time series econometric tool, called the 'structural vector auto-regression model', we evaluated relationship between ethanol production and corn prices. → The result shows that ethanol production affects corn prices in the short run, while corn prices are lowered as other corn demands (feed for livestock or export demand) decline in the long run.

Competition with Variety Seeking and Habitual Consumption: Price Commitment or Quality Commitment?

Directory of Open Access Journals (Sweden)

Liyang Xiong

2017-01-01

Full Text Available This paper investigates price and quality competition in a market where consumers seek variety and habit formation. Variety seeking is modeled as a decrease in the willingness to pay for product purchased on the previous occasion while habitual consumption may increase future marginal utility. We compare two competing strategies: price commitment and quality commitment. With a three-stage Hotelling-type model, we show that variety seeking intensifies while habitual consumption softens the competition. With price commitment, firms supply lower quality levels in period 1 and higher quality levels in period 2, while, with quality commitment, firms charge higher prices in period 1 and lower prices in period 2. However, the habitual consumption brings the opposite effect. In addition, with quality commitment variety seeking leads to a lower profit and a higher consumer surplus, while habitual consumption leads to the opposite results. On the other side, with price commitment these behaviors have no effect on the consumer surplus, although they still lower down the firm profits. Finally, we also identify conditions under which one strategy outperforms the other.
"Overreaction" of Asset Prices in General Equilibrium

OpenAIRE

Aiyagari, S.R.; Gertler, M.

1998-01-01

We attempt to explain the overreaction of asset prices to movements in short-term interest rates, dividends, and asset supplies. The key element of our explanation is a margin constraint that traders face which limits their leverage to a fraction of the value of their assets. Traders may lever themselves, further, either directly by borrowing short term or indirectly by engaging in futures and options trading, so that the scenario is relevant to contemporary financial markets. When some shock...
Concise method for evaluating the probability distribution of the marginal cost of power generation

International Nuclear Information System (INIS)

Zhang, S.H.; Li, Y.Z.

2000-01-01

In the developing electricity market, many questions on electricity pricing and the risk modelling of forward contracts require the evaluation of the expected value and probability distribution of the short-run marginal cost of power generation at any given time. A concise forecasting method is provided, which is consistent with the definitions of marginal costs and the techniques of probabilistic production costing. The method embodies clear physical concepts, so that it can be easily understood theoretically and computationally realised. A numerical example has been used to test the proposed method. (author)
Some Equalities Are More Equal Than Others: Quality Equality Emerges Later Than Numerical Equality.

Science.gov (United States)

Sheskin, Mark; Nadal, Amber; Croom, Adam; Mayer, Tanya; Nissel, Jenny; Bloom, Paul

2016-09-01

By age 6, children typically share an equal number of resources between themselves and others. However, fairness involves not merely that each person receive an equal number of resources ("numerical equality") but also that each person receive equal quality resources ("quality equality"). In Study 1, children (N = 87, 3-10 years) typically split four resources "two each" by age 6, but typically monopolized the better two resources until age 10. In Study 2, a new group of 6- to 8-year-olds (N = 32) allocated resources to third parties according to quality equality, indicating that children in this age group understand that fairness requires both types of equality. © 2016 The Authors. Child Development © 2016 Society for Research in Child Development, Inc.
Switching insurer in the Irish voluntary health insurance market: determinants, incentives, and risk equalization.

Science.gov (United States)

Keegan, Conor; Teljeur, Conor; Turner, Brian; Thomas, Steve

2016-09-01

The determinants of consumer mobility in voluntary health insurance markets providing duplicate cover are not well understood. Consumer mobility can have important implications for competition. Consumers should be price-responsive and be willing to switch insurer in search of the best-value products. Moreover, although theory suggests low-risk consumers are more likely to switch insurer, this process should not be driven by insurers looking to attract low risks. This study utilizes data on 320,830 VHI healthcare policies due for renewal between August 2013 and June 2014. At the time of renewal, policyholders were categorized as either 'switchers' or 'stayers', and policy information was collected for the prior 12 months. Differences between these groups were assessed by means of logistic regression. The ability of Ireland's risk equalization scheme to account for the relative attractiveness of switchers was also examined. Policyholders were price sensitive (OR 1.052, p sensitivity declined with age. Age (OR 0.971; p Consumers appear price-responsive, which is important for competition provided it is based on correct incentives. Risk equalization payments largely eliminated the profitable status of switchers, although further refinements may be required.
Oil turbulence in the next decade. An essay on high oil prices in a supply-constrained world

International Nuclear Information System (INIS)

Jesse, J.H.; Van der Linde, C.

2008-06-01

A CIEP analysis of the recent development of demand and supply for crude oil indicates that the mismatch in supply and demand growth could cause tighter oil markets than we already experience today. In the World Energy Outlook 2007, the International Energy Agency (IEA) warned of a possible 'energy crunch'. But what was anticipated to happen in the first part of the next decade has been fast-forwarded to today, more than 5 years earlier, and could shake the very foundation of our energy systems if no action is undertaken. Without exaggeration, the recent developments in the international oil market are ground-breaking: a little over a year ago, in January 2007, the West Texas Intermediate crude oil price (WTI) traded for USD50 dollar a barrel. Within a year, the price doubled to USD100 per barrel in January 2008 and pushed through to over USD135 in June 2008, against the backdrop of the fresh market supposition about reaching a whopping USD200 per barrel in 2009. If this proves to be true, the world will not only have moved from an 'Oil Demand-led World' to an 'Oil Supply-constrained World' (since 2004) but, more importantly, will then also experience a radical change in the oil price formation. Until recently, the oil price was largely underpinned by the marginal cost of the last barrel needed to match demand, with some political and economic conjuncture mark-ups or -downs. As will be presented in this paper, the current high oil prices are still primarily driven by structural factors that can be well explained without resorting to blaming speculative investors playing the futures market or the low dollar. But if prices are heading towards USD200 a barrel in 12 months' time, or for that matter even to USD150 a barrel, other drivers will gain prominence over marginal costs as the main driver. In that case, OPEC will have accomplished a long-held wish: oil will then be priced at its real value in the Western world (for instance the economic value of mobility for
Estimating the own-price elasticity of demand for irrigation water in the Musi catchment of India

Science.gov (United States)

Davidson, Brian; Hellegers, Petra

2011-10-01

SummaryAs irrigation water is an input into a production process, its demand must be 'derived'. According to theory, a derived demand schedule should be downward sloping and dependent on the outputs produced from it, the prices of other inputs and the price of the water itself. Problems arise when an attempt is made to estimate the demand for irrigation water and the resulting own-price elasticity of demand, as the uses to which water is put are spatially, temporarily and geographically diverse. Because water is not generally freely traded, what normally passes for an estimate of the own-price elasticity of demand for irrigation water is usually a well argued assumption or an estimate that is derived from a simulation model of a hypothesized producer. Such approaches tend to provide an inadequate explanation of what is an extremely complex and important relationship. An adequate explanation of the relationship between the price and the quantity demanded of water should be one that not only accords with the theoretical expectations, but also accounts for the diversity of products produced from water (which includes the management practices of farmers), the seasons in which it is used and over the region within which it is used. The objective in this article is to present a method of estimating the demand curve for irrigation water. The method uses actual field data which is collated using the Residual Method to determine the value of the marginal product of water deployed over a wide range of crops, seasons and regions. These values of the marginal products, all which must lie of the input demand schedule for water, are then ordered from the highest value to the lowest. Then, the amount of irrigation water used for each product, in each season and in each region is cumulatively summed over the range of uses according to the order of the values of the marginal products. This data, once ordered, is then used to econometrically estimate the demand schedule from which
The Welfare Effects of Price Advertising with Basket Shopping: Structural Estimates from Supermarket Promotions

DEFF Research Database (Denmark)

Gao, Cixiu

2015-01-01

This paper empirically examines welfare effects of the informative price advertising in the supermarket retail industry, using structural estimation approaches and individual scanner data. Supermarket retailers use promotions (advertised price cuts) to announce sales as a competing instrument...... promotion intensities are socially excessive. Moreover, the welfare implications are determined by the two opposite effects of price advertising: (1) the informing and therefore welfare-improving effect, and (2) the welfare-harming effect that higher transportation costs incur when promotions are used....... Using a spatial model that accounts for consumer shopping behavior and retailer pricing behavior, I structurally estimate consumer demand and the marginal costs of promotion, following the discrete choice literature and moment inequality approach. The simulation results numerically show that the private...
The effects of recent volatility in international petroleum markets on Canadian wholesale and retail gasoline prices : a report prepared for the Competition Bureau

International Nuclear Information System (INIS)

Roseman, F.

2005-03-01

This report addresses concern over high retail prices of gasoline and the low margins earned on gasoline sales in the Greater Toronto Area and in Ottawa, Ontario. The focus of this report was to understand reasons behind fluctuating prices, and to ascertain whether or not escalations in price were in fact anti-competitive acts that the Competition Bureau would have authority to take action over. Information requests were made by the author to all principal petroleum companies and to importers and marketers of gasoline. Detailed information on pricing was provided. Issues of supply and demand were responsible for spikes in prices. Information on petroleum refining and retailing of gasoline was reviewed, as well as information provided from dialogue and shareholder reports. Average refinery and retail margins in Ontario were discussed. It was concluded that fluctuating prices are the result of the petroleum industry's struggle to meet high demand. Any unscheduled maintenance or unanticipated increases in demand resulted in temporary shortfalls in supply, which led to higher prices. Exports were not a factor in increases in retail prices. In addition, domestic supply and the high cost of meeting environmental regulations with regard to sulphur levels in gasoline and diesel may have also played a role. It was also suggested that prices in Canada reflect overall pricing trends in the United States. tabs., figs
Predictive densities for day-ahead electricity prices using time-adaptive quantile regression

DEFF Research Database (Denmark)

Jónsson, Tryggvi; Pinson, Pierre; Madsen, Henrik

2014-01-01

A large part of the decision-making problems actors of the power system are facing on a daily basis requires scenarios for day-ahead electricity market prices. These scenarios are most likely to be generated based on marginal predictive densities for such prices, then enhanced with a temporal...... dependence structure. A semi-parametric methodology for generating such densities is presented: it includes: (i) a time-adaptive quantile regression model for the 5%–95% quantiles; and (ii) a description of the distribution tails with exponential distributions. The forecasting skill of the proposed model...
The arch oil price manipulators

International Nuclear Information System (INIS)

Anon.

1998-01-01

First set up in 1960, OPEC has become a highly successful cartel and a key player on the world geopolitical scene. Through quotas and dragooning its members, it has maintained the world price of oil at a level much higher than the marginal cost of new oil from the largest producers by holding off new supplies which might otherwise have flooded the market. The two main factors which have made this persistent success possible are examined. They are OPEC's very low production costs vis-a-vis its competitors and the extent of the organisation's shut-in, low-cost reserves. (UK)
The consequences of price differentiation for regional development in Poland

Directory of Open Access Journals (Sweden)

Grzegorz Przekota

2017-07-01

Full Text Available Each region in Poland has a different economic potential due to its own specific features. Taking account of the specific nature of individual regions is important for the management of the country as a whole and of its particular regions. Existing disparities in the economic development may lead to many negative phenomena, such as internal migration or regional marginalization. Excessive price and income inequalities may weaken economic growth throughout the country. It is important for the coherence of the whole country that the disparities between regions are not too big. The study determines the consequences of price differentiation for regional development in Poland. The analysis was conducted using the coefficient of variation, correlation coefficient, regression coefficient and medium pace. The regions differ in terms of development, dynamic growth and wages. However, prices are much less diverse.
7 CFR 1000.50 - Class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Class prices, component prices, and advanced pricing... advanced pricing factors. Class prices per hundredweight of milk containing 3.5 percent butterfat, component prices, and advanced pricing factors shall be as follows. The prices and pricing factors described...
Marketing channels and margins for milk in the province of Sugamuxi (Boyacá

Directory of Open Access Journals (Sweden)

Tellez Iregui Gonzalo

2011-08-01

Full Text Available
margin: 0cm 0cm 0pt; mso-layout-grid-align: none;">The aim of this study is to provide information on the characteristics of the marketing of milk in the province of Sugamuxi, for which marketing channels were identified, marketing margins were established, links in the chain were diagnosed and the implementation of the Competitive Dairy Chain Agreement and its pricing system were assessed. This analysis discriminated the problems of two areas defined by topography (flatland sloped, that is the particular problems they present and the different channels in the marketing of milk they use. 235 traders were surveyed in each area. The marketing channel focused on was: producer - regional processor - wholesaler - Consumers in the plains, and in the hillside area: producer - transporter – regional industry - local - consumer, and especially on increased milk marketing. Marketing margins were calculated for raw milk and pasteurized milk. The milk producers in the flatlands are paid better, the current price system usually does not apply. Also, there is a deficient in knowledge of ACCL by other links in the chain, hindering development and competitiveness of the dairy chain.
Influence of Crack Morphology on Leak Before Break Margins

International Nuclear Information System (INIS)

Weilin Zang

2007-11-01

The purpose of the project is to evaluate the deterministic LBB-margins for different pipe systems in a Swedish PWR-plant and using different crack morphology parameters. Results: - The influence of crack morphology on Leak Before Break (LBB) margins is studied. The subject of the report is a number of LBB-submittals to SKI where deterministic LBB-margins are reported. These submittals typically uses a surface roughness of 0.0762 mm (300 microinch) and number of turns equal to zero and an in-house code for the leak rate evaluations. The present report has shown that these conditions give the largest LBB-margins both in terms of the quotient between the critical crack length and the leakage crack size and for the leak rate margin. - Crack morphology parameters have a strong influence on the leak rate evaluations. Using the SQUIRT code and more recent recommendations for crack morphology parameters, it is shown that in many cases the evaluated margins, using 1 gpm as the reference leak rate detection limit, are below the safety factor of 2 on crack size and 10 on leak rate, which is generally required for LBB approval. - The effect of including weld residual stresses on the LBB margins is also investigated. It is shown that for the two examples studied, weld residual stresses were important for the small diameter thin wall pipe whereas it was negligible for the large diameter thick wall pipe which had a self-balanced weld residual stress distribution
Price and access charge discrimination in electricity distribution: an application to the Chilean case

International Nuclear Information System (INIS)

Raineri, R.; Giaconi, P.

2005-01-01

This paper presents and analyzes a model of electricity distribution in Chile with three alternative regulatory pricing contract schemes for assigning a common capacity cost to final customers and competitive energy sellers. The first scheme involves Ramsey Pricing, while under the second and third schemes the monopoly chooses final prices and access charges subject either to a peak-load Physical Cap or a total revenue Price Cap constraint. In addition, we consider circumstances in which the regulator does not know consumer demand, the monopoly cannot price discriminate beyond a range defined by the marginal cost as a floor and the stand-alone cost as a ceiling, and access charges are set at the fully distributed cost allocation level currently in force. The model is calibrated with Chilean data, and demonstrates that in terms of social welfare the fully distributed cost contract scheme currently in effect can be improved by discriminatory pricing complemented by certain of the analyzed constraints. (author)
Local Staple Food Price Indices in the Age of Biofuels

Science.gov (United States)

Brown, Molly E.

2012-01-01

In many poor, food insecure regions, agriculture is a primary source of income and farmers are reliant both on their own production and on purchasing food in the market to feed their families. Large local food price increases over a short time period can be indicative of a deteriorating food security situation and may be the consequence of weather-related food production declines, Dr can simply be the result of price transmission from the international commodity market. Food price indices developed by the United Nations Food and Agriculture Organization (FAO) are used to monitor food price trends at a global level, but largely reflect supply and demand conditions in export markets far from the places where the chronically food insecure live. A much better understanding of how local staple food prices in isolated regions such as West Africa that grow most of the food they eat to better understand the impact of global commodity market transformations on sensitive communities at the margin. This information will also enable improved strategies for these farmers who are extraordinarily sensitive to climate change impacts on agricultural growing conditions.
The Impact of Oil Price Volatility on Macroeconomic Activity in Russia

Directory of Open Access Journals (Sweden)

Katsuya Ito

2010-07-01

Full Text Available Since the beginning of the 1980s a large number of studies using a vector autoregressive (VAR model have been made on the macroeconomic effects of oil price changes. However, surprisingly few studies have so far focused on Russia, the world’s second largest oil exporter. The purpose of this paper is to empirically examine the impact of oil prices on the macroeconomic variables in Russia using the VAR model. The time span covered by the series is from 1994:Q1 to 2009:Q3, giving 63 observations. The analysis leads to the finding that a 1% increase (decrease in oil prices contributes to the depreciation (appreciation of the exchange rate by 0.17% in the long run, whereas it leads to a 0.46% GDP growth (decline. Likewise, we find that in the short run (8 quarters rising oil prices cause not only the GDP growth and the exchange rate depreciation, but also a marginal increase in inflation rate.
Relief for marginal wells is better than energy tax. [United States: policy

Energy Technology Data Exchange (ETDEWEB)

Swords, J.; Wilson, D. (Coopers and Lybrand (United States))

1993-04-01

By increasing production costs and reducing petroleum prices, President Bill Clinton's proposed energy tax would increase marginal well abandonments and hasten the decline of the US oil and gas industry. Instead, the US needs tax law changes to help counteract the increasing number of oil and gas well abandonments in the lower 48 states. The proposed tax would create potential difficulties, while three incentives could be introduced to reduce abandonments and at the same time preserve US government tax revenues that otherwise would be lost. Eliminating the net income limitation on percentage depletion allowances on wells that would otherwise be abandoned would be a great help for marginal well operators. Extended enhanced oil recovery (EOR) credits and broader investment tax credits could also serve the dual purpose of keeping marginal wells operating longer and generating more federal tax revenues. A marginal well investment tax credit should be provided that is not just a credit for incremented investments that exceed investment in prior years. An investment tax credit based on out-of-pocket costs of production, targeted for marginal wells, would be an important incentive to invest in, and continue to maintain, these properties. (author)
Modelling how much extra motorists pay on the road? A cross-sectional study of profit margins of unleaded petrol in Australia

International Nuclear Information System (INIS)

Valadkhani, Abbas; Babacan, Alperhan

2014-01-01

Gross profitability margin (difference between retail and wholesale prices) for unleaded petrol exhibits substantial variations across 108 cities, towns and regional centres in Australia. This paper examines if such variations (averaged during 2007–2012) can be explained by (a) transport costs proxied by the distance between retailers and wholesalers; (b) the size of the retail market; (c) market competition proxied by the number of cars in the vicinity of the retailers; (d) dummy variables capturing other qualitative attributes associated with the retailers’ locations. Three cross-sectional regressions are estimated but only one successfully passes all diagnostic tests. By identifying a number of locations exhibiting excessive profit margins, the results of this paper enhance the efficiency and transparency of petrol pricing in the retail market. It is found that the extent of excessive profiteering in Western Australia (WA) and South Australia (SA) were lower than other Australian states and territories. This important finding can be explained by a strong presence of independent petrol stations in SA and the successful price-monitoring performance of FuelWatch in WA. - Highlights: • We examine the profit margin for petrol across 108 retail locations in Australia. • No evidence of excessive profiteering was found in 76 out of 108 retail locations. • There are 13 locations in which the likelihood of abnormal margins is quite high. • Regulatory bodies have limited resources so they should target these locations

Pricing of electricity in a time of change - some key issues

International Nuclear Information System (INIS)

Mostert, W.

1995-01-01

The paper covers four topics: (I) what does full cost coverage mean in the Eastern European power sector, (II) LRMC (Long Run Marginal Cost) pricing in regulated utilities versus free market prices; (III) limits to the internalization of external costs in fuel pricing, (IV) pricing of IPPs (Independent Power Producer). The paper argues that the tariff which allows full cost coverage in the Eastern European power sector should be defined as the minimum tariff which allows 30% self-financing of investments and a rate of return of at least 5% on invested assets. The appropriate level of self-financing relates to the appropriate capital structure of the company; the rate of return to the ability to attract finance in the long run. During the last twenty years there has been general consensus among power economists that the application of the LRMC pricing principle for the setting of tariffs was the best principle to ensure efficiency on both the demand as well as the supply side. In free markets involving TPA (Third Party Access) and spot markets, that principle can no longer be applied. In times of scarcity, prices will be above LMRC; in times of surplus capacity below LRMC. Economists have argued for years that external costs and benefits have to be ''internalized'' in tariffs and prices in order to provide consumers and investors with the right pricing principles
Pricing of prescription drugs and its impact on physicians' choice behavior.

Science.gov (United States)

Miao-Sheng, Chen; Yu-Ti, Shih

2008-09-01

This research presents an analysis of Taiwan's health care market with the focus on the pricing of prescription drugs and its impact on physicians' choice behavior. Since the advent of Taiwan's national health insurance, with the competent authority being Bureau of National Health Insurance (BNHI), hospitals are allowed to sell prescription drugs to patients at prices above the purchasing prices, so each prescription drug has two prices: one at which drugs are sold to hospitals; the other which BNHI reimbursement to hospitals. The margin between the different prices is the sales discount that pharmaceutical companies offer to the hospitals. We find that sales discount has a great impact on physicians' choice behavior: i.e., physicians are price-sensitive to prescription drugs. In addition, it is found that too high a sales discount of a prescription drug would result in a too low weighted average price of that drug sold; thus BNHI would be more likely to adjust downward the rate it reimbursement to the hospital. This presents a sales strategy problem to pharmaceutical companies. To solve this, we use the distribution of physicians' evaluations of prescription drugs to establish a profit maximization model in hopes of helping companies to price drugs and find the optimal promotion expending. Ten popular prescription drugs are used in this research as examples.
Under fire: the Price--Anderson Act

Energy Technology Data Exchange (ETDEWEB)

Yeany, P R

1978-07-01

The Price-Anderson Act, considered by some to be essential to the future of nuclear power plants, was recently ruled unconstitutional by a Federal District Court. If the protection of limited liabilities is removed, private industry could not risk participating in the nuclear power industry. Arguments which led to the court's decision reflected concerns over the release of radioactivity and the loss of property values, the effects of heated wastewater on lakes and rivers, and the threat of an accident. The Court found in favor of the plaintiffs on the legal grounds for the suit and found the Price-Anderson Act to be in violation of both Due Process and Equal Protection Clauses. The Court suggested other schemes for spreading the risk. The Supreme Court later overruled the lower Court's decision. 11 references.
Relationship between the Uncompensated Price Elasticity and the Income Elasticity of Demand under Conditions of Additive Preferences.

Directory of Open Access Journals (Sweden)

Lorenzo Sabatelli

Full Text Available Income and price elasticity of demand quantify the responsiveness of markets to changes in income and in prices, respectively. Under the assumptions of utility maximization and preference independence (additive preferences, mathematical relationships between income elasticity values and the uncompensated own and cross price elasticity of demand are here derived using the differential approach to demand analysis. Key parameters are: the elasticity of the marginal utility of income, and the average budget share. The proposed method can be used to forecast the direct and indirect impact of price changes and of financial instruments of policy using available estimates of the income elasticity of demand.
The economics of an efficient reliance on biomass, carbon capture and carbon sequestration in a Kyoto-style emissions control environment

International Nuclear Information System (INIS)

Yohe, G.W.; Carnegie Mellon University, Pittsburgh, PA

2001-01-01

This note employs the economics paradigm to sort through the complications of relying simultaneously on biomass fuels, carbon capture with active sequestration and passive carbon sequestration to meet Kyoto-style carbon emission limits. It does so by exploiting the structure of a tax cum repurchase scheme for carbon. Under such a scheme, the carbon content of fossil fuel should be taxed at the point of purchase at a price that matches the shadow price of the carbon emission limit, but carbon embedded in biomass fuel should go un-taxed. The price of biomass fuel would, though, have to reflect the marginal cost of any externalities it might cause and the opportunity cost of its land-use requirements. Captured carbon could be repurchased at a price equal to the shadow price of carbon, net of the cost of active sequestration, itself the sum of private and social marginal costs. Finally, the price of the passive sequestration of carbon should equal the shadow price of carbon, net of the opportunity cost of setting those resources aside. Since a marketable permit system would support direct estimates of the requisite shadow price of carbon, such a system would also provide direct information about base prices for the tax cum repurchase scheme. To support long-term investment in biomass supply and sequestration, though, changes over time in emission limits must be accomplished in a smooth and predictable manner. (author)
Pricing Mechanism Design for Centralized Pollutant Treatment with SME Alliances

Directory of Open Access Journals (Sweden)

Yuyu Li

2016-06-01

Full Text Available In this paper, we assume that a professional pollutant treatment enterprise treats all of the pollutants emitted by multiple small and medium-sized enterprises (SMEs. In order to determine the treatment price, SMEs can bargain with the pollutant treatment enterprise individually, or through forming alliances. We propose a bargaining game model of centralized pollutant treatment to study how the pollutant treatment price is determined through negotiation. Then, we consider that there is a moral hazard from SMEs in centralized pollutant treatment; in other words, they may break their agreement concerning their quantities of production and pollutant emissions with the pollutant treatment enterprise. We study how the pollutant treatment enterprise can prevent this by pricing mechanism design. It is found that the pollutant treatment enterprise can prevent SMEs’ moral hazard through tiered pricing. If the marginal treatment cost of the pollutant treatment enterprise is a constant, SMEs could bargain with the pollutant treatment enterprise individually, otherwise, they should form a grand alliance to bargain with it as a whole.
Pricing Mechanism Design for Centralized Pollutant Treatment with SME Alliances.

Science.gov (United States)

Li, Yuyu; Huang, Bo; Tao, Fengming

2016-06-22

In this paper, we assume that a professional pollutant treatment enterprise treats all of the pollutants emitted by multiple small and medium-sized enterprises (SMEs). In order to determine the treatment price, SMEs can bargain with the pollutant treatment enterprise individually, or through forming alliances. We propose a bargaining game model of centralized pollutant treatment to study how the pollutant treatment price is determined through negotiation. Then, we consider that there is a moral hazard from SMEs in centralized pollutant treatment; in other words, they may break their agreement concerning their quantities of production and pollutant emissions with the pollutant treatment enterprise. We study how the pollutant treatment enterprise can prevent this by pricing mechanism design. It is found that the pollutant treatment enterprise can prevent SMEs' moral hazard through tiered pricing. If the marginal treatment cost of the pollutant treatment enterprise is a constant, SMEs could bargain with the pollutant treatment enterprise individually, otherwise, they should form a grand alliance to bargain with it as a whole.
Intra-day and regime-switching dynamics in electricity price formation

International Nuclear Information System (INIS)

Karakatsani, Nektaria V.; Bunn, Derek W.

2008-01-01

This paper analyses the complex, non-linear effects of spot price drivers in wholesale electricity markets: their intra-day dynamics and transient irregularities. The context is the UK market, after the reforms introduced in March 2001, analysed with an original set of price drivers reflecting economic, technical, strategic, risk, behavioural and market design effects. Models are estimated separately as daily time-series of the 48 half-hourly trading periods. All coefficients exhibit substantial intra-day variation, relating to the heterogeneity of operating plants and market design aspects. This reveals a market responding to economic fundamentals and plant operating properties, with learning and emergent financial characteristics, as well as some strategic manipulation of capacity, most effectively exercised by the more flexible plants. Using regime-switching parameters, the effects of capacity margin and inter-day capacity adjustment are elucidated, suggesting rent-seeking behaviour, despite the relatively low prices at the time. Overall, high-frequency, aggregate fundamental price models can usefully uncover critical aspects of market performance, evolution and agent behaviour. (author)
Paying the full price of steel – Perspectives on the cost of reducing carbon dioxide emissions from the steel industry

International Nuclear Information System (INIS)

Rootzén, Johan; Johnsson, Filip

2016-01-01

This study examines the impacts felt downstream of carbon pricing and investments made in CO_2 abatement within the steel industry. Using the supply of steel to a passenger car as a case study, the effects of a steel price increase on cost structures and price at each step of the supply chain were assessed. Since the prices of emission allowances under the European Union Emissions Trading System fall well below those required to unlock investments in low-CO_2 production processes in the integrated steelmaking industry this paper seeks to pave the way for a discussion on complementary policy options. The results of the analysis suggest that passing on the compliance costs of the steel industry would have only marginal impacts on costs and prices for the end-use sectors (e.g., on the production cost or selling price of the passenger car). Under the assumptions made herein, at a carbon price of 100 €/tCO_2, the retail price of a mid-sized European passenger car would have to be increased by approximately 100–125 €/car (<0.5%) to cover the projected increases in steel production costs. - Highlights: • Examines impacts downstream of investments in CO_2 abatement in the steel industry. • Show how investing in low-CO_2 processes have marginal impacts in end-user stage. • Increase in the retail price of a mid-sized passenger car would be well below 1%. • Open up for complementary policies, financing mechanisms or new business models.
Timing of Investment and Dynamic Pricing in Privatized Sectors

OpenAIRE

Tarola, Ornella; Trento, Sandro

2010-01-01

Firms in equipment-intensive sectors, where investment in production is performed at diminishing marginal cost, spend billions of dollars in equipment and production capacity. Typically, this expenditure is induced by either the replacement of existing equipment, which deteriorates with age and can result in higher operating costs and lower production capacity, or further investment, to benefit from any technological improvement embedded in new equipment. We identify the optimal price policy,...
Valuing ecosystem services. A shadow price for net primary production

International Nuclear Information System (INIS)

Richmond, Amy; Kaufmann, Robert K.; Myneni, Ranga B.

2007-01-01

We analyze the contribution of ecosystem services to GDP and use this contribution to calculate an empirical price for ecosystem services. Net primary production is used as a proxy for ecosystem services and, along with capital and labor, is used to estimate a Cobb Douglas production function from an international panel. A positive output elasticity for net primary production probably measures both marketed and nonmarketed contributions of ecosystems services. The production function is used to calculate the marginal product of net primary production, which is the shadow price for ecosystem services. The shadow price generally is greatest for developed nations, which have larger technical scalars and use less net primary production per unit output. The rate of technical substitution indicates that the quantity of capital needed to replace a unit of net primary production tends to increase with economic development, and this rate of replacement may ultimately constrain economic growth. (author)
Is Swedish district heating operating on an integrated market? – Differences in pricing, price convergence, and marketing strategy between public and private district heating companies

International Nuclear Information System (INIS)

Åberg, M.; Fälting, L.; Forssell, A.

2016-01-01

The deregulation of the Swedish electricity market in 1996 made it possible to operate municipal district heating commercially. Until that time district heating had been organized mainly as municipal utilities. After 1996 district heating is instead expected to function on a market. In competitive and integrated markets, prices are expected to be equal, or converging. To find out if district heating operates on an integrated market the differences in price levels, price convergence, price strategy, and business goals, among municipal, private and state owned district heating companies are investigated. Price statistics was used along with results from a questionnaire that was answered by representatives for 109 Swedish district heating companies. The results show that prices among district heating systems do not converge significantly and that variations in prices among municipal systems are larger than among private and state owned systems. Furthermore, despite the fact that district heating is supposed to be commercial, a vast majority of district heating companies apply cost-based pricing and not market pricing. The municipal companies give priority to political goals before financial goals. The conclusion is that a Swedish integrated market for heat has not yet evolved, and some district heating price-controlling mechanism is necessary. - Highlights: • Price statistics and owner type data were used along with results from a questionnaire. • Results show that prices among district heating systems do not converge. • Municipal district heating companies still apply cost-based pricing to a large extent. • District heating companies are not operating on an integrated market for heat. • Some price-controlling mechanism for district heating is necessary.
Transparency in natural gas prices in Western Europe

International Nuclear Information System (INIS)

Vrieling, E.B.; Munksgaard, J.; Hopper, R.J.

1989-11-01

The present situation on price transparency in Western Europe and North america within the context of the European internal gas market is analyzed. In chapter one the ideas and policy proposals put forward by the European Commission are discussed. Special attention is paid to the situation of the large industrial consumers. It is argued that price transparency needs to be extended to more upstream price aspects. This includes information on city-gates prices, transmission and handling charges in addition to wellhead and import prices. In Western Europe (chapter two) two pricing principles can be distinguished at the final consumer level: pricing according to costs and prices according to market value. The first principle is applied in France, Belgium, the United Kingdom and Austria, as some cost elements are included in the tariff calculations in Italy. Countries where a market-evaluation methodology is applied are Denmark, the Netherlands, Germany, Spain and Switzerland. In North America (chapter three) price transparency is extensive and part of the necessary conditions of an open access contract carriage market. In order to integrate the aspect of price transparency in the broader framework of the internal gas market a model of an integrated natural gas market is described in chapter four. The model specifies the preconditions of a truly integrated gas market, i.e. accessible market entry at all levels of the gas sector and for all market players, equal market opportunity and a regulatory oversight system. A brief comparison between the model and the actual market situation in Western Europe showed that hardly any of these preconditions are met. The comparison points out which actions need to be taken to implement an internal gas market in Western Europe. 9 appendices
The plunge in German electricity futures prices – Analysis using a parsimonious fundamental model

International Nuclear Information System (INIS)

Kallabis, Thomas; Pape, Christian; Weber, Christoph

2016-01-01

The German market has seen a plunge in wholesale electricity prices from 2007 until 2014, with base futures prices dropping by more than 40%. This is frequently attributed to the unexpected high increase in renewable power generation. Using a parsimonious fundamental model, we determine the respective impact of supply and demand shocks on electricity futures prices. The used methodology is based on a piecewise linear approximation of the supply stack and time-varying price-inelastic demand. This parsimonious model is able to replicate electricity futures prices and discover non-linear dependencies in futures price formation. We show that emission prices have a higher impact on power prices than renewable penetration. Changes in renewables, demand and installed capacities turn out to be similarly important for explaining the decrease in operation margins of conventional power plants. We thus argue for the establishment of an independent authority to stabilize emission prices. - Highlights: •We build a parsimonious fundamental model based on a piecewise linear bid stack. •We use the model to investigate impact factors for the plunge in German futures prices. •Largest impact by CO_2 price developments followed by demand and renewable feed-in. •Power plant operating profits strongly affected by demand and renewables. •We argue that stabilizing CO_2 emission prices could provide better market signals.
Residential Photovoltaic Energy Systems in California: The Effect on Home Sales Prices

Energy Technology Data Exchange (ETDEWEB)

Hoen, Ben; Wiser, Ryan; Thayer, Mark; Cappers, Peter

2012-04-15

Relatively little research exists estimating the marginal impacts of photovoltaic (PV) energy systems on home sale prices. Using a large dataset of California homes that sold from 2000 through mid-2009, we find strong evidence, despite a variety of robustness checks, that existing homes with PV systems sold for a premium over comparable homes without PV systems, implying a near full return on investment. Premiums for new homes are found to be considerably lower than those for existing homes, implying, potentially, a tradeoff between price and sales velocity. The results have significant implications for homeowners, builders, appraisers, lenders, and policymakers.
Regulator preferences and utility prices: evidence from natural gas distribution utilities

International Nuclear Information System (INIS)

Klein, C.C.; Sweeney, G.H.

1999-01-01

We investigate the determinants of regulators' relative weighting of the social welfare of customer groups and utilities using panel data on natural gas distribution utilities in the US state of Tennessee. In contrast to previous empirical work on cross-sections of electric utilities, our results are statistically robust and consistent with the interest group theory of regulation. Intervention in rate cases, settlement vs. litigation of cases, and prices of alternative energy sources, as well as the size characteristics of customer groups and the firm, are significant determinants of the elasticity-weighted price-cost margin (Ramsey number) for each group. (Copyright (c) 1999 Elsevier Science B.V., Amsterdam. All rights reserved.)
Decomposing variation in dairy profitability: the impact of output, inputs, prices, labour and management.

Science.gov (United States)

Wilson, P

2011-08-01

The UK dairy sector has undergone considerable structural change in recent years, with a decrease in the number of producers accompanied by an increased average herd size and increased concentrate use and milk yields. One of the key drivers to producers remaining in the industry is the profitability of their herds. The current paper adopts a holistic approach to decomposing the variation in dairy profitability through an analysis of net margin data explained by physical input-output measures, milk price variation, labour utilization and managerial behaviours and characteristics. Data are drawn from the Farm Business Survey (FBS) for England in 2007/08 for 228 dairy enterprises. Average yields are 7100 litres/cow/yr, from a herd size of 110 cows that use 0·56 forage ha/cow/yr and 43·2 labour h/cow/yr. An average milk price of 22·57 pence per litre (ppl) produced milk output of £1602/cow/yr, which after accounting for calf sales, herd replacements and quota leasing costs, gave an average dairy output of £1516/cow/yr. After total costs of £1464/cow/yr this left an economic return of £52/cow/yr (0·73 ppl) net margin profit. There is wide variation in performance, with the most profitable (as measured by net margin per cow) quartile of producers achieving 2000 litres/cow/yr more than the least profitable quartile, returning a net margin of £335/cow/yr compared to a loss of £361/cow/yr for the least profitable. The most profitable producers operate larger, higher yielding herds and achieve a greater milk price for their output. In addition, a significantly greater number of the most profitable producers undertake financial benchmarking within their businesses and operate specialist dairy farms. When examining the full data set, the most profitable enterprises included significantly greater numbers of organic producers. The most profitable tend to have a greater reliance on independent technical advice, but this finding is not statistically significant
Competition, regulation, and pricing behaviour in the Spanish retail gasoline market

International Nuclear Information System (INIS)

Contin-Pilart, Ignacio; Correlje, Aad F.; Blanca Palacios, M.

2009-01-01

The restructuring of the Spanish oil industry produced a highly concentrated oligopoly in the retail gasoline market. In June 1990, the Spanish government introduced a system of ceiling price regulation in order to ensure that 'liberalization' was accompanied by adequate consumer protection. By 1998, prices were left to the 'free' market. This paper examines the pricing behaviour of the retail gasoline market using multivariate error correction models over the period January 1993 (abolishment of the state monopoly)-December 2004. The results suggest that gasoline retail prices respond symmetrically to increases as well as to decreases in the spot price of gasoline both over the period of price regulation (January 1993-September 1998) and over the period of free market (October 1998-December 2004). However, once the ceiling price regulation was abolished, cooperation emerged between the government and the major operators, Repsol-YPF and Cepsa-Elf, to control the inflation rate. This resulted in a slower rate of adjustment of gasoline retail prices when gasoline spot prices went up, as compared with the European pattern. Finally, the Spanish retail margin was by the end of our timing period of analysis, as in the starting years after the abolishment of the state monopoly, above the European average. This pattern confirms our political economic hypothesis, which suggests that the Spanish government and the oil companies were working together in reducing the inflation, in periods of rising oil and gasoline prices. It is also inferred that explaining the pricing pattern in energy markets may require different hypothesis than the classical perspective, involving just firms taking advantage of market power
Competition, regulation, and pricing behaviour in the Spanish retail gasoline market

Energy Technology Data Exchange (ETDEWEB)

Contin-Pilart, Ignacio [Departamento de Gestion de Empresas, Universidad Publica de Navarra, Campus de Arrosadia, 31006 Pamplona (Spain); Correlje, Aad F. [Section Economics of Infrastructures, Faculty of Technology, Policy and Management, Delft University of Technology, P.O. Box 5015, 2600 GA Delft (Netherlands); Clingendael International Energy Programme (Netherlands); Blanca Palacios, M. [Departamento de Estadistica e Investigacion Operativa, Universidad Publica de Navarra, Campus de Arrosadia, 31006 Pamplona (Spain)

2009-01-15

The restructuring of the Spanish oil industry produced a highly concentrated oligopoly in the retail gasoline market. In June 1990, the Spanish government introduced a system of ceiling price regulation in order to ensure that 'liberalization' was accompanied by adequate consumer protection. By 1998, prices were left to the 'free' market. This paper examines the pricing behaviour of the retail gasoline market using multivariate error correction models over the period January 1993 (abolishment of the state monopoly)-December 2004. The results suggest that gasoline retail prices respond symmetrically to increases as well as to decreases in the spot price of gasoline both over the period of price regulation (January 1993-September 1998) and over the period of free market (October 1998-December 2004). However, once the ceiling price regulation was abolished, cooperation emerged between the government and the major operators, Repsol-YPF and Cepsa-Elf, to control the inflation rate. This resulted in a slower rate of adjustment of gasoline retail prices when gasoline spot prices went up, as compared with the European pattern. Finally, the Spanish retail margin was by the end of our timing period of analysis, as in the starting years after the abolishment of the state monopoly, above the European average. This pattern confirms our political economic hypothesis, which suggests that the Spanish government and the oil companies were working together in reducing the inflation, in periods of rising oil and gasoline prices. It is also inferred that explaining the pricing pattern in energy markets may require different hypothesis than the classical perspective, involving just firms taking advantage of market power. (author)
Share Price Analyst With PBV, DER, And EPS At Initial Public Offering

Directory of Open Access Journals (Sweden)

Kriswanto Kriswanto

2016-09-01

Full Text Available Underpricing and overpricing are commonly happened in stocks market. Underpricing happened when IPO pricing was lower than closing price in the first day stock been trade in the market. There were some measurements to be used, like Price to Book Value (PBV, Price Earning Ratio (PER, Earning Per Share (EPS, Debt to Equity Ratio (DER, Net Profit Margin (NPM, Size of Company (Size and Company Age (Age. The type of research was quantitative with a comparative analysis which focused on the study of literature to support research by describing theories related to the title of the study, data collection of financial statements, and annual reports of companies going public as well as Fact Book published. This article used data from 78 companies that did IPOin 2010 to 2013. This research finds that some statistic used to show majority variables that influence to underpricing is PBV, PER, DER,and Size.

An enhanced radial basis function network for short-term electricity price forecasting

International Nuclear Information System (INIS)

Lin, Whei-Min; Gow, Hong-Jey; Tsai, Ming-Tang

2010-01-01

This paper proposed a price forecasting system for electric market participants to reduce the risk of price volatility. Combining the Radial Basis Function Network (RBFN) and Orthogonal Experimental Design (OED), an Enhanced Radial Basis Function Network (ERBFN) has been proposed for the solving process. The Locational Marginal Price (LMP), system load, transmission flow and temperature of the PJM system were collected and the data clusters were embedded in the Excel Database according to the year, season, workday and weekend. With the OED applied to learning rates in the ERBFN, the forecasting error can be reduced during the training process to improve both accuracy and reliability. This would mean that even the ''spikes'' could be tracked closely. The Back-propagation Neural Network (BPN), Probability Neural Network (PNN), other algorithms, and the proposed ERBFN were all developed and compared to check the performance. Simulation results demonstrated the effectiveness of the proposed ERBFN to provide quality information in a price volatile environment. (author)
Electricity-market price and nuclear power plant shutdown: Evidence from California

International Nuclear Information System (INIS)

Woo, C.K.; Ho, T.; Zarnikau, J.; Olson, A.; Jones, R.; Chait, M.; Horowitz, I.; Wang, J.

2014-01-01

Japan's Fukushima nuclear disaster, triggered by the March 11, 2011 earthquake, has led to calls for shutting down existing nuclear plants. To maintain resource adequacy for a grid's reliable operation, one option is to expand conventional generation, whose marginal unit is typically fueled by natural-gas. Two timely and relevant questions thus arise for a deregulated wholesale electricity market: (1) what is the likely price increase due to a nuclear plant shutdown? and (2) what can be done to mitigate the price increase? To answer these questions, we perform a regression analysis of a large sample of hourly real-time electricity-market price data from the California Independent System Operator (CAISO) for the 33-month sample period of April 2010–December 2012. Our analysis indicates that the 2013 shutdown of the state's San Onofre plant raised the CAISO real-time hourly market prices by $6/MWH to $9/MWH, and that the price increases could have been offset by a combination of demand reduction, increasing solar generation, and increasing wind generation. - Highlights: • Japan's disaster led to calls for shutting down existing nuclear plants. • We perform a regression analysis of California's real-time electricity-market prices. • We estimate that the San Onofre plant shutdown has raised the market prices by $6/MWH to $9/MWH. • The price increases could be offset by demand reduction and renewable generation increase
Forward Volatility Contract Pricing in the Brazilian Market

Directory of Open Access Journals (Sweden)

Sandro Magalhães Manteiga

2004-06-01

Full Text Available In this work we consider the pricing of a special class of volatility derivatives, the so-called variance swaps. The fair value of a variance swap is equal to the expected value of the realized variance of the underlying of the swap during the lifetime of the contract. It is shown how this expected value can be computed by means of an exotic option with logarithmic pay-off. We show how to statically replicate this pay-off in terms of a basket of synthetic vanilla call and put options. We apply this construction to the TNLP4 ticker of BOVESPA and synthetize a basket with pure exposure to volatility using actual market prices.
Mass and energy-capital conservation equations to study the price evolution of non-renewable energy resources

International Nuclear Information System (INIS)

Gori, F.

2006-01-01

Mass conservation equation of non-renewable resources is employed to study the resources remaining in the reservoir according to the extraction policy. The energy conservation equation is transformed into an energy-capital conservation equation. The Hotelling rule is shown to be a special case of the general energy-capital conservation equation when the mass flow rate of extracted resources is equal to unity. Mass and energy-capital conservation equations are then coupled and solved together. It is investigated the price evolution of extracted resources. The conclusion of the Hotelling rule for non-extracted resources, i.e. an exponential increase of the price of non-renewable resources at the rate of current interest, is then generalized. A new parameter, called 'Price Increase Factor', PIF, is introduced as the difference between the current interest rate of capital and the mass flow rate of extraction of non-renewable resources. The price of extracted resources can increase exponentially only if PIF is greater than zero or if the mass flow rate of extraction is lower than the current interest rate of capital. The price is constant if PIF is zero or if the mass flow rate of extraction is equal to the current interest rate. The price is decreasing with time if PIF is smaller than zero or if the mass flow rate of extraction is higher than the current interest rate. (author)
Multi-period equilibrium/near-equilibrium in electricity markets based on locational marginal prices

Science.gov (United States)

Garcia Bertrand, Raquel

In this dissertation we propose an equilibrium procedure that coordinates the point of view of every market agent resulting in an equilibrium that simultaneously maximizes the independent objective of every market agent and satisfies network constraints. Therefore, the activities of the generating companies, consumers and an independent system operator are modeled: (1) The generating companies seek to maximize profits by specifying hourly step functions of productions and minimum selling prices, and bounds on productions. (2) The goals of the consumers are to maximize their economic utilities by specifying hourly step functions of demands and maximum buying prices, and bounds on demands. (3) The independent system operator then clears the market taking into account consistency conditions as well as capacity and line losses so as to achieve maximum social welfare. Then, we approach this equilibrium problem using complementarity theory in order to have the capability of imposing constraints on dual variables, i.e., on prices, such as minimum profit conditions for the generating units or maximum cost conditions for the consumers. In this way, given the form of the individual optimization problems, the Karush-Kuhn-Tucker conditions for the generating companies, the consumers and the independent system operator are both necessary and sufficient. The simultaneous solution to all these conditions constitutes a mixed linear complementarity problem. We include minimum profit constraints imposed by the units in the market equilibrium model. These constraints are added as additional constraints to the equivalent quadratic programming problem of the mixed linear complementarity problem previously described. For the sake of clarity, the proposed equilibrium or near-equilibrium is first developed for the particular case considering only one time period. Afterwards, we consider an equilibrium or near-equilibrium applied to a multi-period framework. This model embodies binary
The effect of house price changes on cohort consumption in Turkey

Directory of Open Access Journals (Sweden)

Evren Ceritoğlu

2017-09-01

Full Text Available This paper analyzes the relationship between house prices and household consumption in Turkey. We utilize twelve consecutive waves of the Turkish Statistical Institute (TURKSTAT Household Budget Surveys (HBS from 2003 to 2014. We construct a pseudo-panel data set using birth-year cohorts following Deaton (1985. We find that house price changes have a positive and significant effect on the growth of cohort consumption. Moreover, the effect of house price changes is stronger for home-owners and it intensifies as we move from young cohorts to old cohorts. We observe that there is a marginally significant and relatively weak relationship between the growth of cohort consumption and house price changes for tenants. However, our pooled sample set is restricted to young and middle-aged cohorts for tenants. In addition, we find that the rise of home-ownership ratio increases the growth of cohort consumption, while the spread of having outstanding housing debt depresses the growth of cohort consumption. Therefore, our empirical findings are in favor of the wealth channel argument.
Green pricing: Customer-oriented marketing of the electricity industry

International Nuclear Information System (INIS)

Weller, T.

1998-01-01

There are at present about 15 established projects launched by energy suppliers in Germany which deserve to be called ''green pricing'' marketing strategies, and about an equal number of further projects at various stages of development which also offer as a ''green'' incentive for customers electricity from renewable energy sources. Worldwide, there are about 50 established green pricing projects, offered primarily in the USA, Switzerland and the Netherlands, and in Germany. The targeted customers of these projects for the time being are exclusively households that cannot easily switch over to other than their local suppliers. It can be expected that with progressive market liberalisation in Great Britain, the USA and, finally, in Germany, competition for this customer group will rapidly increase the number of green pricing marketing projects in these countries. This is why the article here presents a thorough analysis of the specific features of green pricing contracts, their impact on enhanced development and application of the technology for electricity generation from renewables, and a forecast on future developments. (orig./CB) [de
Analysis of relationships between hourly electricity price and load in deregulated real-time power markets

International Nuclear Information System (INIS)

Lo, K.L.; Wu, Y.K.

2004-01-01

Risk management in the electric power industry involves measuring the risk for all instruments owned by a company. The value of many of these instruments depends directly on electricity prices. In theory, the wholesale price in a real-time market should reflect the short-run marginal cost. However, most markets are not perfectly competitive, therefore by understanding the degree of correlation between price and physical drivers, electric traders and consumers can manage their risk more effectively and efficiently. Market data from two power-pool architectures, both pre-2003 ISO-NE and Australia's NEM, have been studied. The dynamic character of electricity price is mean-reverting, and consists of intra-day and weekly variations, seasonal fluctuations, and instant jumps. Parts of them are affected by load demands. Hourly signals on both price and load are divided into deterministic and random components with a discrete Fourier transform algorithm. Next, the real-time price-load relationship for periodic and random signals is examined. In addition, time-varying volatility models are constructed on random price and random load with the GARCH model, and the correlation between them analysed. Volatility plays a critical role on evaluating option pricing and risk management. (author)
Residential Water Demand in a Mexican Biosphere Reserve: Evidence of the Effects of Perceived Price

Directory of Open Access Journals (Sweden)

Marco Antonio Almendarez-Hernández

2016-09-01

Full Text Available The purpose of this paper is to provide empirical evidence for policy-makers of water management, evaluate the applicability of economic variables such as price and other factors that affect demand, and determine the impact thereof on decision-making surrounding water management in the El Vizcaino Biosphere Reserve in Mexico. We estimated a dynamic function with an average price specification, as well as price perception specification. Findings demonstrated that consumers tend to react to perceived average price but not to the marginal price. Furthermore, long-term price elasticity was found to be higher than short-term elasticity, and both elasticities were found to be inelastic. Inelastic elasticities, coupled with rising prices, generate substantial revenues with which to improve water planning and supply quality and to expand service coverage. The results suggest that users’ level of knowledge surrounding price is a key factor to take into account when restructuring rates, especially in situations where consumers do not readily possess the necessary information about their rate structure and usage within a given billing period. Furthermore, the results can help water management policy-makers to achieve goals of economic efficiency, social equity, and environmental sustainability.
7 CFR 1124.50 - Class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Class prices, component prices, and advanced pricing factors. 1124.50 Section 1124.50 Agriculture Regulations of the Department of Agriculture (Continued... prices, and advanced pricing factors. See § 1000.50. ...
7 CFR 1030.50 - Class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Class prices, component prices, and advanced pricing factors. 1030.50 Section 1030.50 Agriculture Regulations of the Department of Agriculture (Continued... prices, and advanced pricing factors. See § 1000.50. ...
Gas prices and price process

International Nuclear Information System (INIS)

Groenewegen, G.G.

1992-01-01

On a conference (Gas for Europe in the 1990's) during the Gasexpo '91 the author held a speech of which the Dutch text is presented here. Attention is paid to the current European pricing methods (prices based on the costs of buying, transporting and distributing the natural gas and prices based on the market value, which is deducted from the prices of alternative fuels), and the transparency of the prices (lack of information on the way the prices are determined). Also attention is paid to the market signal transparency and gas-gas competition, which means a more or less free market of gas distribution. The risks of gas-to-gas competition for a long term price stability, investment policies and security of supply are discussed. Opposition against the Third Party Access (TPA), which is the program to implement gas-to-gas competition, is caused by the fear of natural gas companies for lower gas prices and lower profits. Finally attention is paid to government regulation and the activities of the European Commission (EC) in this matter. 1 fig., 6 ills., 1 tab
Pollution Emissions, Environmental Policy, and Marginal Abatement Costs.

Science.gov (United States)

He, Ling-Yun; Ou, Jia-Jia

2017-12-05

Pollution emissions impose serious social negative externalities, especially in terms of public health. To reduce pollution emissions cost-effectively, the marginal abatement costs (MACs) of pollution emissions must be determined. Since the industrial sectors are the essential pillars of China's economic growth, as well as leading energy consumers and sulfur dioxide (SO₂) emitters, estimating MACs of SO₂ emissions at the industrial level can provide valuable information for all abatement efforts. This paper tries to address the critical and essential issue in pollution abatement: How do we determine the MACs of pollution emissions in China? This paper first quantifies the SO₂ emission contribution of different industrial sectors in the Chinese economy by an Input-Output method and then estimates MACs of SO₂ for industrial sectors at the national level, provincial level, and sectoral level by the shadow price theory. Our results show that six sectors (e.g., the Mining and Washing of Coal sector) should be covered in the Chinese pollution emission trading system. We have also found that the lowest SO₂ shadow price is 2000 Yuan/ton at the national level, and that shadow prices should be set differently at the provincial level. Our empirical study has several important policy implications, e.g., the estimated MACs may be used as a pricing benchmark through emission allowance allocation. In this paper, the MACs of industrial sectors are calculated from the national, provincial and sectoral levels; therefore, we provide an efficient framework to track the complex relationship between sectors and provinces.
Price computation in electricity auctions with complex rules: An analysis of investment signals

International Nuclear Information System (INIS)

Vazquez, Carlos; Hallack, Michelle; Vazquez, Miguel

2017-01-01

This paper discusses the problem of defining marginal costs when integer variables are present, in the context of short-term power auctions. Most of the proposals for price computation existing in the literature are concerned with short-term competitive equilibrium (generators should not be willing to change the dispatch assigned to them by the auctioneer), which implies operational-cost recovery for all of the generators accepted in the auction. However, this is in general not enough to choose between the different pricing schemes. We propose to include an additional criterion in order to discriminate among different pricing schemes: prices have to be also signals for generation expansion. Using this condition, we arrive to a single solution to the problem of defining prices, where they are computed as the shadow prices of the balance equations in a linear version of the unit commitment problem. Importantly, not every linearization of the unit commitment is valid; we develop the conditions for this linear model to provide adequate investment signals. Compared to other proposals in the literature, our results provide a strong motivation for the pricing scheme and a simple method for price computation. - Highlights: • Pricing proposals in power markets often deal with just accounting-cost recovery. • Including opportunity costs is an additional property required for efficient pricing. • We develop a framework to analyze the pricing proposals found in the literature. • We propose a pricing mechanism to include the costs of short-run integer decisions. • As it includes short-run opportunity costs, it provides efficient long-term signals.
Handling value added tax (VAT) in economic evaluations: should prices include VAT?

Science.gov (United States)

Bech, Mickael; Christiansen, Terkel; Gyrd-Hansen, Dorte

2006-01-01

In health economic evaluations, value added tax is commonly treated as a transfer payment. Following this argument, resources are valued equal to their net-of-tax prices in economic evaluations applying a societal perspective. In this article we argue that if there is the possibility that a new healthcare intervention may expand the healthcare budget, the social cost of input factors should be the gross-of-tax prices and not the net-of-tax prices. The rising interest in cost-benefit analysis and the use of absolute thresholds, net benefit estimates and acceptability curves in cost-effectiveness analysis makes this argument highly relevant for an appropriate use of these tools in prioritisation.
Is charity a homogeneous good?

OpenAIRE

Backus, Peter

2010-01-01

In this paper I estimate income and price elasticities of donations to six different charitable causes to test the assumption that charity is a homogeneous good. In the US, charitable donations can be deducted from taxable income. This has long been recognized as producing a price, or taxprice, of giving equal to one minus the marginal tax rate faced by the donor. A substantial portion of the economic literature on giving has focused on estimating price and income elasticities of giving as th...
Valuing water resources in Switzerland using a hedonic price model

Science.gov (United States)

van Dijk, Diana; Siber, Rosi; Brouwer, Roy; Logar, Ivana; Sanadgol, Dorsa

2016-05-01

In this paper, linear and spatial hedonic price models are applied to the housing market in Switzerland, covering all 26 cantons in the country over the period 2005-2010. Besides structural house, neighborhood and socioeconomic characteristics, we include a wide variety of new environmental characteristics related to water to examine their role in explaining variation in sales prices. These include water abundance, different types of water bodies, the recreational function of water, and water disamenity. Significant spatial autocorrelation is found in the estimated models, as well as nonlinear effects for distances to the nearest lake and large river. Significant effects are furthermore found for water abundance and the distance to large rivers, but not to small rivers. Although in both linear and spatial models water related variables explain less than 1% of the price variation, the distance to the nearest bathing site has a larger marginal contribution than many neighborhood-related distance variables. The housing market shows to differentiate between different water related resources in terms of relative contribution to house prices, which could help the housing development industry make more geographically targeted planning activities.
Promoting nuclear energy: market price or regulated tariffs? - 5042

International Nuclear Information System (INIS)

Percebois, J.

2015-01-01

Because of its negative effects, the scheme for aiding renewable energies presently in force in Europe is likely to penalise investments in nuclear energy. The F.I.T. system is a costly mechanism and a source of perverse effects as a switching of the merit order curve on the spot electricity market (with sometimes negative prices). Restoring an equity and 'equal opportunity' for nuclear energy in Europe needs to implement a 'Contract for Differences' scheme for nuclear energy, like the model now gaining favour in the U.K. The contract for differences signed between EDF and the UK government means that if the wholesale price that EDF secures for Hinckley's power falls below the index-linked preset value, the difference will be covered by payments from the UK government. It appears that nuclear power has weakened in Europe by the system of guaranteed purchase prices for renewable energies. Moreover this system is costly. New fairer rules must be implemented in the market. Either the market is left on its own to send the signals to all investors (including renewable energies), or a minimum of regulation is introduced in order to limit the costly surges of under and over capacity. But in the latter case it is necessary to treat all the energy sources in an equal way and guarantee the nuclear industry that it will also recover its fixed costs over the long term)
A Data-Driven Bidding Model for a Cluster of Price-Responsive Consumers of Electricity

DEFF Research Database (Denmark)

Saez Gallego, Javier; Morales González, Juan Miguel; Zugno, Marco

2016-01-01

This paper deals with the market-bidding problem of a cluster of price-responsive consumers of electricity. We develop an inverse optimization scheme that, recast as a bilevel programming problem, uses price-consumption data to estimate the complex market bid that best captures the price......-response of the cluster. The complex market bid is defined as a series of marginal utility functions plus some constraints on demand, such as maximum pick-up and drop-off rates. The proposed modeling approach also leverages information on exogenous factors that may influence the consumption behavior of the cluster, e...... can be largely captured in the form of a complex market bid, so that this could be ultimately used for the cluster to participate in the wholesale electricity market....
A Practical Guide to the Economics of Carbon Pricing

Directory of Open Access Journals (Sweden)

Ross McKitrick

2016-09-01

Full Text Available Canadian economists, politicians and even environmentalists are lining up enthusiastically behind pricing carbon as the solution to controlling greenhouse gas emissions in this country. Pricing carbon (or, more accurately, pricing carbon dioxide is not just a fashionable policy approach; it is the most efficient way we have to ration emissions, as it allows emitters — businesses and consumers — to make the most rational decisions about where it makes economic sense to curtail carbon and where it does not. Painfully costly command-and-control reductions make little sense in Canada, given our marginal contribution to global emissions. When practiced globally, a carbon price deals with Canadian emitters as fairly as it does others. However, a beneficial outcome is not guaranteed: certain rules must be observed in order for carbon pricing to have its intended effect of achieving the optimal balance between emission reduction and economic growth. First and foremost, carbon pricing only works in the absence of any other emission regulations. If pricing is layered on top of an emission-regulating regime already in place (such as emission caps or feed-in-tariff programs, it will not only fail to produce the desired effects in terms of emission rationing, it will have distortionary effects that cause disproportionate damage in the economy. Carbon taxes are meant to replace all other climate-related regulation, while the revenue from the taxes should not be funnelled into substitute goods, like renewable power (pricing lets the market decide which of those substitutes are worth funding but returned directly to taxpayers. The price of carbon is set according to what is known as the “social cost of carbon” — the quantified value of the impact that an emitted tonne of carbon today will have on humans in the future (adjusted to present value. That cost is not limitless; there is a point at which the cost of abating a tonne of carbon outweighs the

Effect of price elasticity of demand in monopolies with gradient adjustment

International Nuclear Information System (INIS)

Cavalli, Fausto; Naimzada, Ahmad

2015-01-01

Highlights: •A monopoly with isoelastic demand function is studied. •Reduced rationality monopolist uses gradient adjustment. •If marginal cost is small, increasing elasticity leads to stable dynamics. •For large marginal cost, dynamic can be unstable for both small and large elasticity. -- Abstract: We study a monopolistic market characterized by a constant elasticity demand function, in which the firm technology is described by a linear total cost function. The firm is assumed to be boundedly rational and to follow a gradient rule to adjust the production level in order to optimize its profit. We focus on what happens on varying the price elasticity of demand, studying the effect on the equilibrium stability. We prove that, depending on the relation between the market size and the marginal cost, two different scenarios are possible, in which elasticity has either a stabilizing or a mixed stabilizing/destabilizing effect
Estonian horticultural peat marketing: sales promotion and price formation. 2. part

International Nuclear Information System (INIS)

Hammer, Hele

1999-01-01

When forming prices, Estonian peat companies' decisions should be based on marginal cost analysis. Unfortunately most Estonian companies sell peat to intermediaries and cannot influence its price. Estonian peat producers have to choose between either selling peat directly or selling through a central marketing organization. Both systems have their pros and cons. Direct selling gives more freedom to individual producers but is more risky. Central marketing makes cost saving possible and is more effective and stable, but may alienate producers from clients and markets. Whichever marketing system Estonian peat companies choose, the most important elements in their marketing strategy should be: careful market analysis, personal sales, attending trade shows, catalogues, quality service and offering transportation services. (author)
Macroeconomic impacts of oil price shocks in Asian economies

International Nuclear Information System (INIS)

Cunado, Juncal; Jo, Soojin; Perez de Gracia, Fernando

2015-01-01

This paper analyzes the macroeconomic impact of structural oil shocks in four of the top oil-consuming Asian economies, using a VAR model. We identify three different structural oil shocks via sign restrictions: an oil supply shock, an oil demand shock driven by global economic activity and an oil-specific demand shock. The main results suggest that economic activity and prices respond very differently to oil price shocks depending on their types. In particular, an oil supply shock has a limited impact, while a demand shock driven by global economic activity has a significant positive effect in all four Asian countries examined. Our finding also includes that policy tools such as interest rates and exchange rates help mitigating the effects of supply shocks in Japan and Korea; however, they can be more actively used in response to demands shocks. - Highlights: • We analyze the effects of three structural oil price shocks on Asian economies. • Supply shocks have limited impact on the economic activity of Asian economies examined. • Demand shocks due to economic activity boosts GDP of all economies. • CPIs in India and Indonesia were only marginally affected by oil price shocks. • Monetary and exchange rate tools help mitigating supply shocks in Korea and Japan.
Pricing strategies in inelastic energy markets: can we use less if we can't extract more?

Science.gov (United States)

Voinov, Alexey; Filatova, Tatiana

2014-03-01

Limited supply of nonrenewable energy resources under growing energy demand creates a situation when a marginal change in the quantity supplied or demanded causes non-marginal swings in price levels. The situation is worsened by the fact that we are currently running out of cheap energy resources at the global scale while adaptation to climate change requires extra energy costs. It is often argued that technology and alternative energy will be a solution. However, alternative energy infrastructure also requires additional energy investments, which can further increase the gap between energy demand and supply. This paper presents an explorative model that demonstrates that a smooth transition from an oil-based economy to alternative energy sources is possible only if it is started well in advance while fossil resources are still abundant. Later the transition looks much more dramatic and it becomes risky to rely entirely on technological solutions. It becomes increasingly likely that in addition to technological solutions that can increase supply we will need to find ways to decrease demand and consumption. We further argue that market mechanisms can be just as powerful tools to curb demand as they have traditionally been for stimulating consumption. We observe that individuals who consume more energy resources benefit at the expense of those who consume less, effectively imposing price externalities on the latters. We suggest two transparent and flexible methods of pricing that attempt to eliminate price externalities on energy resources. Such pricing schemes stimulate less consumption and can smooth the transition to renewable energy.
Wind prices are down - but are they too low?

International Nuclear Information System (INIS)

Milborrow, D.

1998-01-01

The highly competitive nature of the NFFO and SRO bidding processes may be putting undue pressure on manufacturers' profit margins, restricting funds for investment and RandD. Taking the wider view, RandD in the wind industry is very modest relative to its output. Nevertheless, the wind industry is delivering increasingly reliable and cost effective wind turbines. The needs for further RandD are critically examined and the paper includes assessments of future wind energy price trends. (Author)
Distribution Locational Marginal Pricing through Quadratic Programming for Congestion Management in Distribution Networks

DEFF Research Database (Denmark)

Huang, Shaojun; Wu, Qiuwei; Oren, Shmuel S.

2015-01-01

) calculates dynamic tariffs and publishes them to the aggregators, who make the optimal energy plans for the flexible demands. The DLMP through QP instead of linear programing as studied in previous literatures solves the multiple solution issue of the ag- gregator optimization which may cause......This paper presents the distribution locational mar- ginal pricing (DLMP) method through quadratic programming (QP) designed to alleviate the congestion that might occur in a distribution network with high penetration of flexible demands. In the DLMP method, the distribution system operator (DSO...
The marginal cost of public funds is one at the optimal tax system

NARCIS (Netherlands)

B. Jacobs (Bas)

2018-01-01

textabstractThis paper develops a Mirrlees framework with skill and preference heterogeneity to analyze optimal linear and nonlinear redistributive taxes, optimal provision of public goods, and the marginal cost of public funds (MCF). It is shown that the MCF equals one at the optimal tax system,
From tariffs to prices

International Nuclear Information System (INIS)

Baena, D. Eduardo Martin

1998-01-01

It looks like that all over the World things are changing. Many countries, Spain among them, where electricity regulations were usual, are changing their regulatory mainframe. Since January 1, 1998, electricity production is a deregulated activity in Spain. There has to be open market competition. Prices that are very important for the time coming, have to cover the production cost plus some profits in order to maintain the company profitability. This cultural change applies to all our production facilities, including nuclear power plants. Taking into account this new situation and the nuclear competitiveness, it is important for all of us to understand this issue. As it is well known, nuclear energy is capital intensive, that means it has to compete as base load units due to their low operating costs and their large capital ones. For that reason it is important to reduce as much as possible the operating and maintenance cost as well as the fuel one, which will allow nuclear plants to compete in marginal costs with others units. Nuclear energy, in Spain, is not going to fix the pool price but it has to recover some depreciation through it, the remaining being recovered by the recognition of an important part of the stranded cost. (author)
Creation and Valuation of Instruments Compensating Lower Share Prices with the Help of Black–Scholes Formula

Directory of Open Access Journals (Sweden)

Zaremba Leszek

2017-02-01

Full Text Available In this paper, we present a 1-period model of the Polish financial market from the view point of KGHM, the Polish largest listed company that suffered huge declines in share prices from 125 PLN in August 2015 to 60 PLN in January 2015. Our goal is to show how KGHM might create a portfolio (with practically zero cost, which would fully compensate the abovementioned declines. The methodology presented below may be equally well employed by many other listed companies and investment funds, as well. We create here a matrix model of the Polish financial market and employ the Black-Scholes formula to valuate portfolios compensating potential declines of KGHM’s shares prices. To give more insight to practitioners wishing to apply the results presented here to other listed companies, we distinguish two cases. In one of them, volatility of KGHM’s share prices is 20%, and in the other case it equals 33%.
Operationalizing value-based pricing of medicines : a taxonomy of approaches.

Science.gov (United States)

Sussex, Jon; Towse, Adrian; Devlin, Nancy

2013-01-01

elements of value, including both QALYs and benefits unrelated to QALYs, is to use a multi-criteria decision analysis (MCDA) approach. All approaches to VBP ultimately require the conversion of value, however assessed, into a monetary price. This requires assessment of the marginal values of all types of benefit, not just of QALYs. All stages of the VBP process are subject to uncertainty and margins of error. Consequently, the assessment of overall value can provide bounds to a price negotiation but cannot be expected to identify a precise value-based price.
Marginal Consistency: Upper-Bounding Partition Functions over Commutative Semirings.

Science.gov (United States)

Werner, Tomás

2015-07-01

Many inference tasks in pattern recognition and artificial intelligence lead to partition functions in which addition and multiplication are abstract binary operations forming a commutative semiring. By generalizing max-sum diffusion (one of convergent message passing algorithms for approximate MAP inference in graphical models), we propose an iterative algorithm to upper bound such partition functions over commutative semirings. The iteration of the algorithm is remarkably simple: change any two factors of the partition function such that their product remains the same and their overlapping marginals become equal. In many commutative semirings, repeating this iteration for different pairs of factors converges to a fixed point when the overlapping marginals of every pair of factors coincide. We call this state marginal consistency. During that, an upper bound on the partition function monotonically decreases. This abstract algorithm unifies several existing algorithms, including max-sum diffusion and basic constraint propagation (or local consistency) algorithms in constraint programming. We further construct a hierarchy of marginal consistencies of increasingly higher levels and show than any such level can be enforced by adding identity factors of higher arity (order). Finally, we discuss instances of the framework for several semirings, including the distributive lattice and the max-sum and sum-product semirings.
International trade and migration in the presence of sector-specific labor quality pricing distortions

NARCIS (Netherlands)

Huizinga, H.P.

1995-01-01

In one of two sectors, there are labor quality pricing distortions in the sense that labor obtains the average rather than marginal product. This may be due to a failure on the part of employers to observe individual labor quality or due to an income redistributing union. Relatively low quality
Relating price strategies and price-setting practices

NARCIS (Netherlands)

Ingenbleek, P.T.M.; Lans, van der I.A.

2013-01-01

Purpose - This article addresses the relationship between price strategies and price-setting practices. The first derive from a normative tradition in the pricing literature and the latter from a descriptive tradition. Price strategies are visible in the market, whereas price-setting practices are
Battery prices and capacity sensitivity: Electric drive vehicles

DEFF Research Database (Denmark)

Juul, Nina

2012-01-01

, the prices at which the electric drive vehicles become of interest to the power system are found. Smart charge, including the opportunity to discharge (vehicle-to-grid) is used in all scenarios. Analyses show that the marginal benefits decrease the larger the battery. For very high battery prices, large......The increase in fluctuating power production requires an increase in flexibility in the system as well. Flexibility can be found in generation technologies with fast response times or in storage options. In the transport sector, the proportion of electric drive vehicles is expected to increase over...... the next decade or two. These vehicles can provide some of the flexibility needed in the power system, in terms of both flexible demand and electricity storage. However, what are the batteries worth to the power system? And does the value depend on battery capacity? This article presents an analysis...
Contemporary approaches to reducing the risks of central counterparties based on the use of marginal contributions

Directory of Open Access Journals (Sweden)

Utkin Viktor Sergeyevich

2012-07-01

Full Text Available To protect their own interests central counterparties has developed a number of procedures, including payment of guarantee margin by trading members as a means to ensure their positions. This article discusses a number of approaches, which attempt to simulate the risks of the Central Committee, as well as calculating the amount of margin and other resources in the event of insolvency. These approaches are based on the simulation of the three main types: (a statistical modeling; (b optimization modeling, and (c model of option pricing. The author incorporates the basic provisions of models.
Electricity prices and generator behaviour in gross pool electricity markets

International Nuclear Information System (INIS)

O'Mahoney, Amy; Denny, Eleanor

2013-01-01

Electricity market liberalisation has become common practice internationally. The justification for this process has been to enhance competition in a market traditionally characterised by statutory monopolies in an attempt to reduce costs to end-users. This paper endeavours to see whether a pool market achieves this goal of increasing competition and reducing electricity prices. Here the electricity market is set up as a sealed bid second price auction. Theory predicts that such markets should result with firms bidding their marginal cost, thereby resulting in an efficient outcome and lower costs to consumers. The Irish electricity system with a gross pool market experiences among the highest electricity prices in Europe. Thus, we analyse the Irish pool system econometrically in order to test if the high electricity prices seen there are due to participants bidding outside of market rules or out of line with theory. Overall we do not find any evidence that the interaction between generator and the pool in the Irish electricity market is not efficient. Thus, the pool element of the market structure does not explain the high electricity prices experienced in Ireland. - Highlights: • We consider whether a gross pool achieves competitive behaviour. • We analyse the Irish pool system econometrically. • Results indicate the Irish pool system appears to work efficiently. • Generators appear to be bidding appropriately
Price elasticity of the demand for sugar sweetened beverages and soft drinks in Mexico.

Science.gov (United States)

Colchero, M A; Salgado, J C; Unar-Munguía, M; Hernández-Ávila, M; Rivera-Dommarco, J A

2015-12-01

A large and growing body of scientific evidence demonstrates that sugar drinks are harmful to health. Intake of sugar-sweetened beverages (SSB) is a risk factor for obesity and type 2 diabetes. Mexico has one of the largest per capita consumption of soft drinks worldwide and high rates of obesity and diabetes. Fiscal approaches such as taxation have been recommended as a public health policy to reduce SSB consumption. We estimated an almost ideal demand system with linear approximation for beverages and high-energy food by simultaneous equations and derived the own and cross price elasticities for soft drinks and for all SSB (soft drinks, fruit juices, fruit drinks, flavored water and energy drinks). Models were stratified by income quintile and marginality index at the municipality level. Price elasticity for soft drinks was -1.06 and -1.16 for SSB, i.e., a 10% price increase was associated with a decrease in quantity consumed of soft drinks by 10.6% and 11.6% for SSB. A price increase in soft drinks is associated with larger quantity consumed of water, milk, snacks and sugar and a decrease in the consumption of other SSB, candies and traditional snacks. The same was found for SSB except that an increase in price of SSB was associated with a decrease in snacks. Higher elasticities were found among households living in rural areas (for soft drinks), in more marginalized areas and with lower income. Implementation of a tax to soft drinks or to SSB could decrease consumption particularly among the poor. Substitutions and complementarities with other food and beverages should be evaluated to assess the potential impact on total calories consumed. Copyright © 2015 The Authors. Published by Elsevier B.V. All rights reserved.
Marginal Abatement Cost of CO2 in China Based on Directional Distance Function: An Industry Perspective

Directory of Open Access Journals (Sweden)

Bowen Xiao

2017-01-01

Full Text Available Industrial sectors account for around 70% of the total energy-related CO2 emissions in China. It is of great importance to measure the potential for CO2 emissions reduction and calculate the carbon price in industrial sectors covered in the Emissions Trading Scheme and carbon tax. This paper employs the directional distance function to calculate the marginal abatement costs of CO2 emissions during 2005–2011 and makes a comparative analysis between our study and the relevant literature. Our empirical results show that the marginal abatement costs vary greatly from industry to industry: high marginal abatement costs occur in industries with low carbon intensity, and vice versa. In the application of the marginal abatement cost, the abatement distribution scheme with minimum cost is established under different abatement targets. The conclusions of abatement distribution scheme indicate that those heavy industries with low MACs and high carbon intensity should take more responsibility for emissions reduction and vice versa. Finally, the policy implications for marginal abatement cost are provided.
Marginal Bidding: An Application of the Equimarginal Principle to Bidding in TAC SCM

Science.gov (United States)

Greenwald, Amy; Naroditskiy, Victor; Odean, Tyler; Ramirez, Mauricio; Sodomka, Eric; Zimmerman, Joe; Cutler, Clark

We present a fast and effective bidding strategy for the Trading Agent Competition in Supply Chain Management (TAC SCM). In TAC SCM, manufacturers compete to procure computer parts from suppliers (the procurement problem), and then sell assembled computers to customers in reverse auctions (the bidding problem). This paper is concerned only with bidding, in which an agent must decide how many computers to sell and at what prices to sell them. We propose a greedy solution, Marginal Bidding, inspired by the Equimarginal Principle, which states that revenue is maximized among possible uses of a resource when the return on the last unit of the resource is the same across all areas of use. We show experimentally that certain variations of Marginal Bidding can compute bids faster than our ILP solution, which enables Marginal Bidders to consider future demand as well as current demand, and hence achieve greater revenues when knowledge of the future is valuable.
The impacts of price responsiveness on strategic equilibrium in competitive electricity markets

Energy Technology Data Exchange (ETDEWEB)

Bompard, Ettore; Ma, Yuchao; Napoli, Roberto [Department of Electrical Engineering, Politecnico di Torino, C.so Duca degli Abruzzi, 24, 10129 Torino (Italy); Abrate, Graziano; Ragazzi, Elena [Ceris-CNR, Via Real Collegio, 30, 10024 Moncalieri (Italy)

2007-06-15

One of the most important aspects that may affect market welfare is that related to the low demand responsiveness to price. This situation may greatly impact the market performance causing low efficiency, high prices and a disproportional allocation of surpluses. The structure of electricity markets is usually oligopolistic; producers may bid prices higher than their marginal costs to the short run wholesale market, inducing outcome deviations from the perfect competitive benchmark. The possibility of gaming the market is amplified in the presence of low demand responsiveness to price. This paper proposes a model to assess the role of demand elasticity in mitigating the effects of supply side strategic bidding behavior. We model the supply side in a conjectural supply function (CSF) framework, which allows incorporation of exogenous changes in demand elasticity and different levels of competition in a given market. The impacts of demand responsiveness on the market performances are assessed through a set of proposed indices that are applied to a model of the Italian market. (author)

The impacts of price responsiveness on strategic equilibrium in competitive electricity markets

International Nuclear Information System (INIS)

Bompard, Ettore; Ma, Yuchao; Napoli, Roberto; Abrate, Graziano; Ragazzi, Elena

2007-01-01

One of the most important aspects that may affect market welfare is that related to the low demand responsiveness to price. This situation may greatly impact the market performance causing low efficiency, high prices and a disproportional allocation of surpluses. The structure of electricity markets is usually oligopolistic; producers may bid prices higher than their marginal costs to the short run wholesale market, inducing outcome deviations from the perfect competitive benchmark. The possibility of gaming the market is amplified in the presence of low demand responsiveness to price. This paper proposes a model to assess the role of demand elasticity in mitigating the effects of supply side strategic bidding behavior. We model the supply side in a conjectural supply function (CSF) framework, which allows incorporation of exogenous changes in demand elasticity and different levels of competition in a given market. The impacts of demand responsiveness on the market performances are assessed through a set of proposed indices that are applied to a model of the Italian market. (author)
7 CFR 1131.53 - Announcement of class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Announcement of class prices, component prices, and advanced pricing factors. 1131.53 Section 1131.53 Agriculture Regulations of the Department of Agriculture... class prices, component prices, and advanced pricing factors. See § 1000.53. ...
7 CFR 1005.53 - Announcement of class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Announcement of class prices, component prices, and advanced pricing factors. 1005.53 Section 1005.53 Agriculture Regulations of the Department of Agriculture... class prices, component prices, and advanced pricing factors. See § 1000.53. ...
7 CFR 1126.53 - Announcement of class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Announcement of class prices, component prices, and advanced pricing factors. 1126.53 Section 1126.53 Agriculture Regulations of the Department of Agriculture... class prices, component prices, and advanced pricing factors. See § 1000.53. ...
7 CFR 1032.53 - Announcement of class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Announcement of class prices, component prices, and advanced pricing factors. 1032.53 Section 1032.53 Agriculture Regulations of the Department of Agriculture... class prices, component prices, and advanced pricing factors. See § 1000.53. ...
7 CFR 1030.53 - Announcement of class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Announcement of class prices, component prices, and advanced pricing factors. 1030.53 Section 1030.53 Agriculture Regulations of the Department of Agriculture... of class prices, component prices, and advanced pricing factors. See § 1000.53. ...
7 CFR 1033.53 - Announcement of class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Announcement of class prices, component prices, and advanced pricing factors. 1033.53 Section 1033.53 Agriculture Regulations of the Department of Agriculture... class prices, component prices, and advanced pricing factors. See § 1000.53. ...
7 CFR 1001.53 - Announcement of class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Announcement of class prices, component prices, and advanced pricing factors. 1001.53 Section 1001.53 Agriculture Regulations of the Department of Agriculture... class prices, component prices, and advanced pricing factors. See § 1000.53. ...
7 CFR 1007.53 - Announcement of class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Announcement of class prices, component prices, and advanced pricing factors. 1007.53 Section 1007.53 Agriculture Regulations of the Department of Agriculture... class prices, component prices, and advanced pricing factors. See § 1000.53. ...
7 CFR 1006.53 - Announcement of class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Announcement of class prices, component prices, and advanced pricing factors. 1006.53 Section 1006.53 Agriculture Regulations of the Department of Agriculture... class prices, component prices, and advanced pricing factors. See § 1000.53. ...
7 CFR 1033.50 - Class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Class prices, component prices, and advanced pricing factors. 1033.50 Section 1033.50 Agriculture Regulations of the Department of Agriculture (Continued..., and advanced pricing factors. See § 1000.50. ...
7 CFR 1005.50 - Class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Class prices, component prices, and advanced pricing factors. 1005.50 Section 1005.50 Agriculture Regulations of the Department of Agriculture (Continued..., and advanced pricing factors. See § 1000.50. ...
7 CFR 1001.50 - Class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Class prices, component prices, and advanced pricing factors. 1001.50 Section 1001.50 Agriculture Regulations of the Department of Agriculture (Continued..., and advanced pricing factors. See § 1000.50. ...
7 CFR 1006.50 - Class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Class prices, component prices, and advanced pricing factors. 1006.50 Section 1006.50 Agriculture Regulations of the Department of Agriculture (Continued..., and advanced pricing factors. See § 1000.50. ...
7 CFR 1126.50 - Class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Class prices, component prices, and advanced pricing factors. 1126.50 Section 1126.50 Agriculture Regulations of the Department of Agriculture (Continued..., and advanced pricing factors. See § 1000.50. ...
7 CFR 1032.50 - Class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Class prices, component prices, and advanced pricing factors. 1032.50 Section 1032.50 Agriculture Regulations of the Department of Agriculture (Continued..., and advanced pricing factors. See § 1000.50. ...
7 CFR 1131.50 - Class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Class prices, component prices, and advanced pricing factors. 1131.50 Section 1131.50 Agriculture Regulations of the Department of Agriculture (Continued..., and advanced pricing factors. See § 1000.50. ...
7 CFR 1007.50 - Class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Class prices, component prices, and advanced pricing factors. 1007.50 Section 1007.50 Agriculture Regulations of the Department of Agriculture (Continued..., and advanced pricing factors. See § 1000.50. ...
To Cooperate or Not? An Analysis of Complementary Product Pricing in Green Supply Chain

Directory of Open Access Journals (Sweden)

Jie Wei

2018-05-01

Full Text Available This paper investigates the green supply chain pricing problem when two manufacturers sell complementary products to one retailer. Considering the manufacturers’ cooperation or noncooperation strategies, we first give the centralized pricing model as a benchmark. According to market power among the supply chain, we analyze two types of supply chains: supplier-led type where the green driving factor comes from the suppliers and retailer-led type where the core member retailer leads the green supply chain. We then give two decentralized pricing models through considering strategic cooperation between two manufacturers and different structures. Corresponding closed-form expressions for equilibrium pricing strategies are established. Finally, many valuable managerial results are acquired through comparing the profits and equilibrium decisions of these models. Our paper shows that consumers are indifferent as to who is the leader of the two echelons when the manufacturers adopt non-cooperative action; the two complementary products get the same optimal wholesale/retail prices, maximum retail margins, and maximum demands regardless of the manufacturers’ cooperation or noncooperation strategies.
Heterogeneous Investors, Negotiation Strength & Asset Prices in Private Markets: Evidence from Commercial Real Estate

Directory of Open Access Journals (Sweden)

David C. Ling

2013-08-01

Full Text Available We examine the impact of heterogeneous investors with asymmetric bargaining positions on transaction prices in private commercial real estate markets. Using a dataset that contains nearly 100,000 commercial real estate transactions during 1997-2009, we examine the extent to which common conditions of sale and buyer characteristics affect bargaining power and negotiated prices. We find that tax-motivated buyers seeking to complete a delayed Section 1031 exchange pay an average price premium of 12.5% when purchasing smaller properties. However, these price premiums for exchange motivated buyers are not observed among more expensive properties. We find strong evidence that out-of-state buyers pay significantly more (8 - 11% premium for commercial properties than in-state buyers. Consistent with our expectations, we find that sellers of distressed properties negotiate significantly lower transaction prices (13 - 15% discount than sellers of non-distressed properties, all else equal. Finally, we find evidence that REITs pay price premiums between 14 - 16% for office and industrial and retail properties. Our results strongly support the notion that relative bargaining power influences negotiated transaction prices.

7 CFR 1124.53 - Announcement of class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... 7 Agriculture 9 2010-01-01 2009-01-01 true Announcement of class prices, component prices, and advanced pricing factors. 1124.53 Section 1124.53 Agriculture Regulations of the Department of Agriculture... Announcement of class prices, component prices, and advanced pricing factors. See § 1000.53. ...
Profiling the high frequency wine consumer by price segmentation in the US market

Directory of Open Access Journals (Sweden)

Liz Thach

2015-06-01

Full Text Available Heavy users of consumer products are important to marketers as a profitable target segment. This is equally true in the wine industry, but with the added precaution of encouraging responsible consumption. This study examines the attributes and behaviors of 681 high frequency (heavy-user wine consumers in the US, based on a price segmentation of High, Moderate, and Low Spenders. For this study, price segmentation was defined as the price typically paid for a bottle of wine for home consumption. Significant differences were discovered based on gender, age, income, wine involvement, shopping channel, ecommerce/social media usage and other key areas. Implications for marketing managers as well as areas of future research are described.
Voltage margin control for offshore multi-use platform integration

DEFF Research Database (Denmark)

Mier, V.; Casielles, P.G.; Koto, J.

This paper discusses a multiterminal direct current (MTDC) connection proposed for integration of offshore multi-use platforms into continental grids. Voltage source converters (VSC) were selected for their suitability for multiterminal dc systems and for their flexibility in control. A five...... terminal VSC-MTDC which includes offshore generation, storage, loads and ac connection, was modeled and simulated in DigSILENT Power Factory software. Voltage margin method has been used for reliable operation of the MTDC system without the need of fast communication. Simulation results show......, sell or store energy attending to the price in the electricity market....
Are daily and weekly load and spot price dynamics in Australia's National Electricity Market governed by episodic nonlinearity?

International Nuclear Information System (INIS)

Wild, Phillip; Hinich, Melvin J.; Foster, John

2010-01-01

In this article, we use half hourly spot electricity prices and load data for the National Electricity Market (NEM) of Australia for the period from December 1998 to June 2009 to test for episodic nonlinearity in the dynamics governing daily and weekly cycles in load and spot price time series data. We apply the portmanteau correlation, bicorrelation and tricorrelation tests introduced in Hinich (1996) to the time series of half hourly spot prices and load demand from 7/12/1998 to 30/06/2009 using a FORTRAN 95 program. We find the presence of significant third and fourth-order (nonlinear) serial dependence in the weekly load and spot price data in particular, but to a much more marginal extent, in the daily data. (author)
Edgeworth Price Cycles, Cost-Based Pricing, and Sticky Pricing in Retail Gasoline Markets

OpenAIRE

Michael D. Noel

2007-01-01

This paper examines dynamic pricing behavior in retail gasoline markets for 19 Canadian cities over 574 weeks. I find three distinct retail pricing patterns: 1. cost-based pricing, 2. sticky pricing, and 3. steep, asymmetric retail price cycles that, while seldom documented empirically, resemble those of Maskin & Tirole[1988]. Using a Markov switching regression, I estimate the prevalence of patterns and the structural characteristics of the cycles. Retail price cycles prevail in over 40% of ...
Forward and Spot Prices in Multi-Settlement Wholesale Electricity Markets

Science.gov (United States)

Larrieu, Jeremy

In organized wholesale electricity markets, power is sold competitively in a multi-unit multi-settlement single-price auction comprised of a forward and a spot market. This dissertation attempts to understand the structure of the forward premium in these markets, and to identify the factors that may lead forward and spot prices to converge or diverge. These markets are unique in that the forward demand is price-sensitive, while spot residual demand is perfectly inelastic and must be met in full, a crucial design feature the literature often glosses over. An important contribution of this dissertation is the explicit modeling of each market separately in order to understand how generation and load choose to act in each one, and the consequences of these actions on equilibrium prices and quantities given that firms maximize joint profits over both markets. In the first essay, I construct a two-settlement model of electricity prices in which firms that own asymmetric capacity-constrained units facing convex costs compete to meet demand from consumers, first in quantities, then in prices. I show that the forward premium depends on the costliness of spot production relative to firms' ability to exercise market power by setting quantities in the forward market. In the second essay, I test the model from the first essay with unit-level capacity and marginal cost data from the California Independent System Operator (CAISO). I show that the model closely replicates observed price formation in the CAISO. In the third essay, I estimate a time series model of the CAISO forward premium in order to measure the impact that virtual bidding has had on forward and spot price convergence in California between April 2009 and March 2014. I find virtual bidding to have caused forward and spot prices to diverge due to the large number of market participants looking to hedge against - or speculate on - the occurrence of infrequent but large spot price spikes by placing virtual demand bids.
Competitive Pricing by a Price Leader

OpenAIRE

Abhik Roy; Dominique M. Hanssens; Jagmohan S. Raju

1994-01-01

We examine the problem of pricing in a market where one brand acts as a price leader. We develop a procedure to estimate a leader's price rule, which is optimal given a sales target objective, and allows for the inclusion of demand forecasts. We illustrate our estimation procedure by calibrating this optimal price rule for both the leader and the follower using data on past sales and prices from the mid-size sedan segment of the U.S. automobile market. Our results suggest that a leader-follow...
Gasoline prices in Canada : report of Standing Committee on Industry, Science and Technology

International Nuclear Information System (INIS)

Lastewka, W.

2003-11-01

The House of Commons Standing Committee on Industry, Science and Technology has reviewed the data on retail, rack and crude gasoline prices in Canada in response to soaring prices. Prices were compared to those in the United States and elsewhere. The Committee looked at all possible explanations for the most recent increase in gasoline prices and has concluded that the recent increase in the price of gasoline was the result of industry's competitive reactions to a series of international crises and abnormally cold weather in North America. No evidence indicated anticompetitive conduct on the part of the industry, nor was there evidence of abusive behaviour on the part of vertically integrated suppliers in the form of squeezing retail margins to eliminate or discipline independent retailers. The Committee relied on data collected and published by the industry. It would have preferred an independent source, but none was available. The Committee recommended that the Government of Canada create and fund a Petroleum Monitoring Agency to collect and disseminate price data on crude oil, refined petroleum products, and retail gasoline for all relevant North American markets. The agency will report to Parliament on an annual basis for 3 years. The report will include information on the competitive aspects of the petroleum sector in Canada. refs., tabs., figs
Quality Minus Junk

DEFF Research Database (Denmark)

Asness, Clifford S.; Frazzini, Andrea; Heje Pedersen, Lasse

We define a quality security as one that has characteristics that, all-else-equal, an investor should be willing to pay a higher price for: stocks that are safe, profitable, growing, and well managed. High-quality stocks do have higher prices on average, but not by a very large margin. Perhaps....... The price of quality – i.e., how much investors pay extra for higher quality stocks – varies over time, reaching a low during the internet bubble. Further, a low price of quality predicts a high future return of QMJ. Finally, controlling for quality resurrects the otherwise moribund size effect....
Costs for frequency reserve and regulation power options in Iceland

International Nuclear Information System (INIS)

2005-01-01

The price for ancillary services that ensures an efficient use of resources is equal to the marginal costs of providing these services. In an expanding hydro power system there are two optimal designs for expansion; one design is optimal when ancillary services are not to be provided and another design is optimal when these services are to be provided. The right price for ancillary services cover the net difference in costs between the two designs. The difference in design in an expanding system is specific for that particular system and hence no general number can be specified. In an expanding hydro power system, the efficient price typically covers parts of the marginal investment costs for excess capacity in turbine and generator, but no investment costs for waterways and reservoirs
Valuation of marginal CO2 abatement options for electric power plants in Korea

International Nuclear Information System (INIS)

Park, Hojeong; Lim, Jaekyu

2009-01-01

The electricity generation sector in Korea is under pressure to mitigate greenhouse gases as directed by the Kyoto Protocol. The principal compliance options for power companies under the cap-and-trade include the application of direct CO 2 emission abatement and the procurement of emission allowances. The objective of this paper is to provide an analytical framework for assessing the cost-effectiveness of these options. We attempt to derive the marginal abatement cost for CO 2 using the output distance function and analyze the relative advantages of emission allowance procurement option as compared to direct abatement option. Real-option approach is adopted to incorporate emission allowance price uncertainty. Empirical result shows the marginal abatement cost with an average of Euro 14.04/ton CO 2 for fossil-fueled power plants and confirms the existence of substantial cost heterogeneity among plants which is sufficient to achieve trading gains in allowance market. The comparison of two options enables us to identify the optimal position of the compliance for each plant. Sensitivity analyses are also presented with regard to several key parameters including the initial allowance prices and interest rate. The result of this paper may help Korean power plants to prepare for upcoming regulations targeted toward the reduction of domestic greenhouse gases.
Two-part pricing structure in long-term gas sales contracts

International Nuclear Information System (INIS)

Slocum, J.C.; Lee, S.Y.

1992-01-01

Although the incremental electricity generation market has the potential to be a major growth area for natural gas demand in the U.S., it may never live up to such promise unless gas suppliers are more willing to enter into long-term gas sales agreements necessary to nurture this segment of the industry. The authors submit that producer reluctance to enter into such long-term sales agreements can be traced, at least in part to the differing contract price requirements between gas producers and buyers. This paper will address an evolving solution to this contracting dilemma - the development of a two-part pricing structure for the gas commodity. A two-part pricing structure includes a usage or throughput charge established in a way to yield a marginal gas cost competitive with electric utility avoided costs, and a reservation charge established to guarantee a minimum cash flow to the producer. Moreover, the combined effect of the two charges may yield total revenues that better reflect the producer's replacement cost of the reserves committed under the contract. 2 tabs
List prices vs. bargain prices: which solution to estimate consumer price indices?

OpenAIRE

Carlo De Gregorio

2010-01-01

Alternative approaches to CPI surveys are here evaluated, in markets where final prices are based on some sort of price listing. Three types of surveys are compared: local surveys (LOC), with small samples and a local price collection; list price surveys (LIS), with huge samples and centralised collection; mixed surveys (MXD), in which LOC and LIS are jointly used. Based on a multiplicative pricing model, some conditions are derived to establish the relative efficiency of these approaches. Th...
No pressure on Slovnaft to lower fuel prices

International Nuclear Information System (INIS)

Beer, G.; Schoenwiesner, R.; Debnar, M.

2004-01-01

The Bratislava based refinery, Slovnaft has a dominant position on the Slovak fuel market. But this dominant market position is not specific to Slovakia - other national markets also have domestic producers with dominant positions. Fuel prices have increased substantially and the consumers are looking for a c ulprit' and have found it in the major player on the market. All those who are talking of 'record-breaking' fuel prices seem to have forgotten about inflation rates in recent years. But the situation on the Slovak market is not entirely standard. Slovak customers are right in objecting to the fact that fuel prices are often higher in Slovakia (pre-tax) than in neighbouring countries. But there is nothing to indicate this situation is likely to change. The consumption of petrol and diesel in Slovakia is growing. Many well-established companies have left the Slovak market and 50 competition is decreasing. And those that have stayed buy their fuel from Slovnaft and do not exercise any pressure on retail margins. Small independent distributors are not in a position to offer lower prices and they themselves are forced to decrease their margins. Slovnaft, controlled by the Hungarian company MOL, dictates the rules not only because its refineries produce 76% of all fuel sold on the Slovak market but also due to the fact that the company controls 39% of the retail network. It does not make a difference whether drivers stop at non--brand petrol stations, or use the petrol stations of international companies, nearly all companies operating in Slovakia buy their fuel from the Bratislava refinery with the exception of high octane petrol and winter diesel. Despite refinery over-capacity in Central Europe and the high number of producers operating within a small area, competition is not noticeable on the Slovak market. In theory, competition could be provided by the Polish refineries, the Czech refinery which imports under the JET brand, the Austrian owned OMV, the
Do Medicare Advantage Plans Select Enrollees in Higher Margin Clinical Categories?

Science.gov (United States)

Newhouse, Joseph P.; McWilliams, J. Michael; Price, Mary; Huang, Jie; Fireman, Bruce; Hsu, John

2013-01-01

The CMS-HCC risk adjustment system for Medicare Advantage (MA) plans calculates weights, which are effectively relative prices, for beneficiaries with different observable characteristics. To do so it uses the relative amounts spent per beneficiary with those characteristics in Traditional Medicare (TM). For multiple reasons one might expect relative amounts in MA to differ from TM, thereby making some beneficiaries more profitable to treat than others. Much of the difference comes from differences in how TM and MA treat different diseases or diagnoses. Using data on actual medical spending from two MA-HMO plans, we show that the weights calculated from MA costs do indeed differ from those calculated using TM spending. One of the two plans (Plan 1) is more typical of MA-HMO plans in that it contracts with independent community providers, while the other (Plan 2) is vertically integrated with care delivery. We calculate margins, or Average Revenue/Average Cost, for Medicare beneficiaries in the two plans who have one of 48 different combinations of medical conditions. The two plans’ margins for these 48 conditions are correlated (r=0.39, pincentive for selection by HCC. Nonetheless, we find no evidence of overrepresentation of beneficiaries in high margin HCC’s in either plan. Nor, using the margins from Plan 1, the more typical plan, do we find evidence of overrepresentation of high margin HCC’s in Medicare more generally. These results do not permit a conclusion on overall social efficiency, but we note that selection according to margin could be socially efficient. In addition, our findings suggest there are omitted interaction terms in the risk adjustment model that Medicare currently uses. PMID:24308879
A method to select aperture margin in collimated spot scanning proton therapy

International Nuclear Information System (INIS)

Wang, Dongxu; Smith, Blake R; Gelover, Edgar; Flynn, Ryan T; Hyer, Daniel E

2015-01-01

The use of collimator or aperture may sharpen the lateral dose gradient for spot scanning proton therapy. However, to date, there has not been a standard method to determine the aperture margin for a single field in collimated spot scanning proton therapy. This study describes a theoretical framework to select the optimal aperture margin for a single field, and also presents the spot spacing limit required such that the optimal aperture margin exists. Since, for a proton pencil beam partially intercepted by collimator, the maximum point dose (spot center) shifts away from the original pencil beam central axis, we propose that the optimal margin should be equal to the maximum pencil beam center shift under the condition that spot spacing is small with respect to the maximum pencil beam center shift, which can be numerically determined based on beam modeling data. A test case is presented which demonstrates agreement with the prediction made based on the proposed methods. When apertures are applied in a commercial treatment planning system this method may be implemented. (note)
A DYNAMIC APPROACH TO CALCULATE SHADOW PRICES OF WATER RESOURCES FOR NINE MAJOR RIVERS IN CHINA

Institute of Scientific and Technical Information of China (English)

Jing HE; Xikang CHEN; Yong SHI

2006-01-01

China is experiencing from serious water issues. There are many differences among the Nine Major Rivers basins of China in the construction of dikes, reservoirs, floodgates, flood discharge projects, flood diversion projects, water ecological construction, water conservancy management, etc.The shadow prices of water resources for Nine Major Rivers can provide suggestions to the Chinese government. This article develops a dynamic shadow prices approach based on a multiperiod input-output optimizing model. Unlike previous approaches, the new model is based on the dynamic computable general equilibrium (DCGE) model to solve the problem of marginal long-term prices of water resources.First, definitions and algorithms of DCGE are elaborated. Second, the results of shadow prices of water resources for Nine Major Rivers in 1949-2050 in China using the National Water Conservancy input-holding-output table for Nine Major Rivers in 1999 are listed. A conclusion of this article is that the shadow prices of water resources for Nine Major Rivers are largely based on the extent of scarcity.Selling prices of water resources should be revised via the usage of parameters representing shadow prices.
New Insights into Passive Margin Development from a Global Deep Seismic Reflection Dataset

Science.gov (United States)

Bellingham, Paul; Pindell, James; Graham, Rod; Horn, Brian

2014-05-01

The kinematic and dynamic evolution of the world's passive margins is still poorly understood. Yet the need to replace reserves, a high oil price and advances in drilling technology have pushed the international oil and gas industry to explore in the deep and ultra-deep waters of the continental margins. To support this exploration and help understand these margins, ION-GXT has acquired, processed and interpreted BasinSPAN surveys across many of the world's passive margins. Observations from these data lead us to consider the modes of subsidence and uplift at both volcanic and non-volcanic margins. At non-volcanic margins, it appears that frequently much of the subsidence post-dates major rifting and is not thermal in origin. Rather the subsidence is associated with extensional displacement on a major fault or shear zone running at least as deep as the continental Moho. We believe that the subsidence is structural and is probably associated with the pinching out (boudinage) of the Lower Crust so that the Upper crust effectively collapses onto the mantle. Eventually this will lead to the exhumation of the sub-continental mantle at the sea bed. Volcanic margins present more complex challenges both in terms of imaging and interpretation. The addition of volcanic and plutonic material into the system and dynamic effects all impact subsidence and uplift. However, we will show some fundamental observations regarding the kinematic development of volcanic margins and especially SDRs which demonstate that the process of collapse and the development of shear zones within and below the crust are also in existence at this type of margin. A model is presented of 'magma welds' whereby packages of SDRs collapse onto an emerging sub-crustal shear zone and it is this collapse which creates the commonly observed SDR geometry. Examples will be shown from East India, Newfoundland, Brazil, Argentina and the Gulf of Mexico.
Arbitrage Pricing, Capital Asset Pricing, and Agricultural Assets

OpenAIRE

Louise M. Arthur; Colin A. Carter; Fay Abizadeh

1988-01-01

A new asset pricing model, the arbitrage pricing theory, has been developed as an alternative to the capital asset pricing model. The arbitrage pricing theory model is used to analyze the relationship between risk and return for agricultural assets. The major conclusion is that the arbitrage pricing theory results support previous capital asset pricing model findings that the estimated risk associated with agricultural assets is low. This conclusion is more robust for the arbitrage pricing th...
A new division of the Nordic countries into potential price regions; Ny inndeling av Norden i elspotomraader

Energy Technology Data Exchange (ETDEWEB)

NONE

2001-07-01

It has been proposed that the division of the Nordic countries into electric spot regions (potential price regions) should be changed. This implies, among other things, that Sweden is divided into three price regions. The price regions will be used for dealing with large bottlenecks, while small bottlenecks will be handled by means of countertrade. Will the change increase the risk of market power? Probably not. The present arrangement offers about equally good possibilities to exercise market power and causes price signals in general to become erroneous and that trade becomes limited. The absence of price limits in Sweden will probably not increase competition by much since the same producers are numerous on both sides of the limits. Price regions in Sweden may sharpen competition between producers in each region and producers in adjacent regions outside of Sweden.

7 CFR 1000.53 - Announcement of class prices, component prices, and advanced pricing factors.

Science.gov (United States)

2010-01-01

... advanced pricing factors. 1000.53 Section 1000.53 Agriculture Regulations of the Department of Agriculture..., component prices, and advanced pricing factors. (a) On or before the 5th day of the month, the market... administrator for each Federal milk marketing order shall announce the following prices and pricing factors for...
Allocating the CO2 emissions of an oil refinery with Aumann-Shapley prices. A reply

International Nuclear Information System (INIS)

Pierru, Axel

2010-01-01

In this reply, I oppose and further debate some of the points raised in Mr. Tehrani's comment (2010). In addition, I show that, when dealing with short-run linear-programming models with not-adjusted-to-demand capacities, Aumann-Shapley prices can be considered as an attempt to recreate long-run marginal costs. (author)
Is there an optimum grant size and exercise price for incentivizing executives?

Directory of Open Access Journals (Sweden)

Jean M. Canil

2010-01-01

Full Text Available This study tests the Hall and Murphy (2000, 2002 propositions using a dataset wherein in-the money and out-of-the-money option grants are just as prevalent as at-the-money option grants. The choice of grant size and exercise price in determining optimal pay-performance sensitivity, reveals an over prescription of at-the-money options at the expense of in-the-money options, particularly for high risk-averse CEOs. Also, pay-performance sensitivity is found unexpectedly negatively related to the exercise price, which is attributed to an equally unexpected inverse relation between risk aversion and grant size.
Ex-vessel Fish Price Database: Disaggregating Prices for Low-Priced Species from Reduction Fisheries

Directory of Open Access Journals (Sweden)

Travis C. Tai

2017-11-01

Full Text Available Ex-vessel fish prices are essential for comprehensive fisheries management and socioeconomic analyses for fisheries science. In this paper, we reconstructed a global ex-vessel price database with the following areas of improvement: (1 compiling reported prices explicitly listed as “for reduction to fishmeal and fish oil” to estimate prices separately for catches destined for fishmeal and fish oil production, and other non-direct human consumption purposes; (2 including 95% confidence limit estimates for each price estimation; and (3 increasing the number of input data and the number of price estimates to match the reconstructed Sea Around Us catch database. Our primary focus was to address this first area of improvement as ex-vessel prices for catches destined for non-direct human consumption purposes were substantially overestimated, notably in countries with large reduction fisheries. For example in Peru, 2010 landed values were estimated as 3.8 billion real 2010 USD when using separate prices for reduction fisheries, compared with 5.8 billion using previous methods with only one price for all end-products. This update of the price database has significant global and country-specific impacts on fisheries price and landed value trends over time.
Market structure, excess capacity and price movement: implications for the world oil market in the 1990s

International Nuclear Information System (INIS)

Iwayemi, A.

1992-01-01

World Oil Market developments, since the second half of the 1980s, have demonstrated again the conventional wisdom in economics that competitive production and pricing strategies have among producers, when the industry is characterized by significant excess capacity, in exerting strong downward pressure on the price. The magnitude and speed of the price falls depends not only on the size and utilization of the available excess capacity, but also on the perception of the markets as regards the degree of the imbalance between demand and supply. The impact of output competition on oil revenues in the short run depends on the magnitude of the price elasticity of demand. The most vivid illustration of this phenomenon is captured by the experience of 1986, when competition for market share among oil producers, despite the existence of about 20 per cent excess capacity, culminated in a sharp drop in price, with only a marginal improvement in demand. (author)
Optimal price/performance for energy storage systems. Doing more with less

International Nuclear Information System (INIS)

Broekhuizen, H.J.

2004-01-01

This article discusses the possibility of improving the price-performance ratio for thermal energy storage systems. It recommends restricting the source flow rate by a variety of measures, and trying to achieve equal maximum flow rates in summer and winter. Also recommended are the maximum deployment of sustainable system components and their use for various functions [nl
Using time series structural characteristics to analyze grain prices in food insecure countries

Science.gov (United States)

Davenport, Frank; Funk, Chris

2015-01-01

Two components of food security monitoring are accurate forecasts of local grain prices and the ability to identify unusual price behavior. We evaluated a method that can both facilitate forecasts of cross-country grain price data and identify dissimilarities in price behavior across multiple markets. This method, characteristic based clustering (CBC), identifies similarities in multiple time series based on structural characteristics in the data. Here, we conducted a simulation experiment to determine if CBC can be used to improve the accuracy of maize price forecasts. We then compared forecast accuracies among clustered and non-clustered price series over a rolling time horizon. We found that the accuracy of forecasts on clusters of time series were equal to or worse than forecasts based on individual time series. However, in the following experiment we found that CBC was still useful for price analysis. We used the clusters to explore the similarity of price behavior among Kenyan maize markets. We found that price behavior in the isolated markets of Mandera and Marsabit has become increasingly dissimilar from markets in other Kenyan cities, and that these dissimilarities could not be explained solely by geographic distance. The structural isolation of Mandera and Marsabit that we find in this paper is supported by field studies on food security and market integration in Kenya. Our results suggest that a market with a unique price series (as measured by structural characteristics that differ from neighboring markets) may lack market integration and food security.
Cultural variations in the sexual marketplace: gender equality correlates with more sexual activity.

Science.gov (United States)

Baumeister, Roy F; Mendoza, Juan Pablo

2011-01-01

Sexual economics theory assumes that heterosexual communities can be analyzed as marketplaces in which men offer women resources such as love, respect, money, and commitment in exchange for sex. In response to economic, political, and other disadvantages, women collectively restrict their sexuality to maintain a low supply relative to male demand, thereby ensuring a high price. Hence, we tested the hypothesis that sexual norms and practices would be more restrictive in countries marked by gender inequality than in countries where the genders were more equal. An international online sex survey (N>317,000) yielded four measures of sexual activity, and 37 nations' means on all four measures were correlated with independent (World Economic Forum) ratings of gender equality. Consistent with predictions, relatively high gender equality was associated with more casual sex, more sex partners per capita, younger ages for first sex, and greater tolerance/approval of premarital sex.
Price signals and investment incentives in wholesale electricity spot markets

International Nuclear Information System (INIS)

Vassilopoulos, Philippe

2007-01-01

We look at how prices from energy-only power markets can send the right signals and give the correct incentives for investments in production capacity. Through numerical simulations of spot prices over 2003-2005 we compare the investment signal sent by observed electricity prices in France and what would be competitive prices with an optimal mix and with the installed capacity. Observed prices tend to overestimate profitability for the base-load, making the signal too strong and underestimate profitability for the peak load, making the signal too weak. However, as a large share of consumers is still paying regulated tariffs, scarcity rents are capped. We simulate future prices for France for 2010 to 2020 to understand the incentives to invest. When the entry is free, the incentives to invest given by the future prices are consistent with the optimal mix including the interconnections and nuclear build is strong. With political or regulatory barriers to the construction of new power plants for new entrants (i.e. finding new sites), there are no incentives for the incumbent (that owns all existing base-load and peak load capacity) to add more nuclear capacity. In this situation, new entry would have to be coal or gas except if units are bid strategically to maintain profitability and market share. Moreover, it can also be profitable to limit prices and restrain entry in order to receive higher future revenues. When the base-load is less concentrated and instead of a dominant firm the nuclear capacity is divided into five (equal share) firms, the incentives to invest reappear and the threat of entry becomes more credible. (author) [fr
A qualitative and quantitative analysis of vegetable pricing in supermarket

Science.gov (United States)

Miranda, Suci

2017-06-01

The purpose of this study is to analyze the variables affecting the determination of the sale price of vegetable which is constant over time in a supermarket qualitatively and quantitavely. It focuses on the non-organic vegetable with a fixed selling price over time such as spinach, beet, and parsley. In qualitative analysis, the sale price determination is influenced by the vegetable characteristics: (1) vegetable segmentation (low to high daily consumed); (2) vegetable age (how long it can last related to freshness); which both characteristic relates to the inventory management and ultimately to the sale price in supermarket. While quantitatively, the vegetables are divided into two categories: the leaf vegetable group that the leaves are eaten as a vegetable with the aging product (a) = 0 and the shelf life (t) = 0, and the non-leafy vegetable group with the aging group (a) = a+1 and the shelf life (t) = t+1. The vegetable age (a) = 0 means they only last for one day when they are ordered then they have to terminate. Whereas a+1 is that they have a longer life for more than a day such as beet, white radish, and string beans. The shelf life refers to how long it will be placed in a shelf in supermarket in line with the vegetable age. According to the cost plus pricing method using full price costing approach, production costs, non-production costs, and markup are adjusted differently for each category. There is a holding cost added to the sale price of the non-leafy vegetable, yet it is assumed a 0 holding cost for the leafy vegetable category. The amount of expected margin of each category is correlated to the vegetable characteristics.
Price strategy and pricing strategy: terms and content identification

OpenAIRE

Panasenko Tetyana

2015-01-01

The article is devoted to the terminology and content identification of seemingly identical concepts "price strategy" and "pricing strategy". The article contains evidence that the price strategy determines the direction, principles and procedure of implementing the company price policy and pricing strategy creates a set of rules and practical methods of price formation in accordance with the pricing strategy of the company.
Power and pay: The union and equal pay at B.C. Electric/Hydro

International Nuclear Information System (INIS)

Creese, G.

1993-01-01

The struggle for equal pay for women in one large office union, the Office and Technical Employees' Union (OTEU), at British Columbia Electric/Hydro is analyzed. The analysis concentrates on the second phase of the equal pay movement that preoccupied the union for over 30 years starting in 1949. Equal pay for equal job-evaluation was finally achieved in 1981, yet this struggle did not produce a subsequent questioning of gender bias within the job evaluation process or the structure of the existing hierarchy of jobs. The study illustrates some of the ways that gender hierarchies and inequities are defined and reinforced by employers seeking to maintain profits by keeping labor costs down, as BC Electric/Hydro resisted eliminating the differential in male and female pay, systematically restructured unequal pay, and continually resorted to lower community standards even when the company's own job evaluation system suggested equal comparators with male jobs. Gendered jobs are also shaped by union practices, as evidenced by the OTEU's role in restructuring the postwar gender division of labor in the late 1940s, as well as their early and persistent challenges to the female differential but, at the same time, the continued marginalization of equal pay as a women's issue rather than a general union issue. 66 refs
Value based pricing: the least valued pricing strategy

OpenAIRE

Hoenen, Bob

2017-01-01

Pricing has been one of the least researched topics in marketing, although within these pricing strategies: cost-plus pricing is considered as the leading pricing strategy worldwide. Why should companies use such an unprofitable strategy, where fighting for a higher market share due to low prices is more a rule than exception? VBP is one of the most underestimated strategies by organizations. The definition of VBP is: 'value pricing applies to products that have the potential of being differe...
48 CFR 36.207 - Pricing fixed-price construction contracts.

Science.gov (United States)

2010-10-01

... 48 Federal Acquisition Regulations System 1 2010-10-01 2010-10-01 false Pricing fixed-price... Contracting for Construction 36.207 Pricing fixed-price construction contracts. (a) Generally, firm-fixed... methods. (b) Lump-sum pricing shall be used in preference to unit pricing except when— (1) Large...
A numerical method to estimate the parameters of the CEV model implied by American option prices: Evidence from NYSE

International Nuclear Information System (INIS)

Ballestra, Luca Vincenzo; Cecere, Liliana

2016-01-01

Highlights: • We develop a method to compute the parameters of the CEV model implied by American options. • This is the first procedure for calibrating the CEV model to American option prices. • The proposed approach is extensively tested on the NYSE market. • The novel method turns out to be very efficient in computing the CEV model parameters. • The CEV model provides only a marginal improvement over the lognormal model. - Abstract: We develop a highly efficient procedure to forecast the parameters of the constant elasticity of variance (CEV) model implied by American options. In particular, first of all, the American option prices predicted by the CEV model are calculated using an accurate and fast finite difference scheme. Then, the parameters of the CEV model are obtained by minimizing the distance between theoretical and empirical option prices, which yields an optimization problem that is solved using an ad-hoc numerical procedure. The proposed approach, which turns out to be very efficient from the computational standpoint, is used to test the goodness-of-fit of the CEV model in predicting the prices of American options traded on the NYSE. The results obtained reveal that the CEV model does not provide a very good agreement with real market data and yields only a marginal improvement over the more popular Black–Scholes model.
Price strategy and pricing strategy: terms and content identification

Directory of Open Access Journals (Sweden)

Panasenko Tetyana

2015-11-01

Full Text Available The article is devoted to the terminology and content identification of seemingly identical concepts "price strategy" and "pricing strategy". The article contains evidence that the price strategy determines the direction, principles and procedure of implementing the company price policy and pricing strategy creates a set of rules and practical methods of price formation in accordance with the pricing strategy of the company.
Pricing and promotion effects on low-fat vending snack purchases: the CHIPS Study.

Science.gov (United States)

French, S A; Jeffery, R W; Story, M; Breitlow, K K; Baxter, J S; Hannan, P; Snyder, M P

2001-01-01

OBJECTIVES: This study examined the effects of pricing and promotion strategies on purchases of low-fat snacks from vending machines. METHODS: Low-fat snacks were added to 55 vending machines in a convenience sample of 12 secondary schools and 12 worksites. Four pricing levels (equal price, 10% reduction, 25% reduction, 50% reduction) and 3 promotional conditions (none, low-fat label, low-fat label plus promotional sign) were crossed in a Latin square design. Sales of low-fat vending snacks were measured continuously for the 12-month intervention. RESULTS: Price reductions of 10%, 25%, and 50% on low-fat snacks were associated with significant increases in low-fat snack sales; percentages of low-fat snack sales increased by 9%, 39%, and 93%, respectively. Promotional signage was independently but weakly associated with increases in low-fat snack sales. Average profits per machine were not affected by the vending interventions. CONCLUSIONS: Reducing relative prices on low-fat snacks was effective in promoting lower-fat snack purchases from vending machines in both adult and adolescent populations. PMID:11189801
An Inventory Model for Deteriorating Items with Permissible Delay in Payment and Inflation Under Price Dependent Demand

Directory of Open Access Journals (Sweden)

Manisha Pal

2012-07-01

Full Text Available Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman","serif";} The paper studies an inventory model for deteriorating items when demand for the item is dependent on the selling price. Shortages are allowed and backlogged, and price inflation is taken into consideration. Further, it is assumed that the supplier permits the inventory manager to settle his accounts within a given specified time period. Numerical examples are cited to illustrate the model and to study the sensitivity of the model to change in model parameters.
Taxes, cost and demand shifters as determinants in the regional gasoline price formation process: Evidence from Spain

International Nuclear Information System (INIS)

Bello, Alejandro; Contín-Pilart, Ignacio

2012-01-01

This paper examines the pass-through of regional tax changes and spot price variations to regional gasoline prices in Spain. It also analyzes the impact of all major cost and demand shifters that contribute to regional gasoline price formation. To address these research issues, a reduced form price equation using monthly time-series cross-sectional (TSCS) data from January 2004 through December 2008 is estimated. Strong and consistent evidence of full shifting of regional tax changes to regional gasoline prices is found. Gasoline spot price changes are more than proportionally passed through to retail prices. In addition, the empirical evidence shows, on the one hand, that regional gasoline price differences before taxes continue to be quite narrow and, on the other hand, that there is still a margin for larger gasoline price differences among regions. This suggest that “traditional practices” from the monopoly era (i.e. relatively uniform regional gasoline prices) persist after the market has been liberalized, which may have been facilitated by the strong and uniform presence of the major Spanish-based refining companies in the retail sector over the whole country. - Highlights: ► The paper analyzes the impact of all major demand and cost shifters that contribute to regional gasoline price formation. ► It shows that the relatively uniform regional gasoline prices persist after the Spanish gasoline market has been liberalized. ► It shows that regional tax changes are fully passed on to regional gasoline prices. ► It also shows that gasoline spot price changes are fully passed on to consumer prices.
Analisis Margin Pemasaran Daging Ayam Ras Petelur Afkir di Pasar Tradisional Kabupaten Dairi

OpenAIRE

Ginting, Novrianto

2017-01-01

This study aimed to determine the factors causing the high price of culled chicken laying in the Dairi through the analysis of marketing channels along with marketing margins. The study was conducted in several traditional markets districts in Dairi, Livestock laying hens in May to the month of June 2016. The research method used is survey method with 5 traditional markets which had 24 respondents, primary data were obtained from retailers in traditional markets Dairi, while secondary data ob...

A Two-Sided Market Model of Optimal Price Structure for Instant Messenger

Directory of Open Access Journals (Sweden)

Jun Xu

2013-01-01

Full Text Available Instant messenger (IM is one of the most popular Internet applications all over the world. This paper examines the pricing problem of IM based on two-sided market model. IM serves as a two-sided platform, which gets both Internet users and advertisers on board. This paper concludes that IM operator adopts a heavily skewed price structure that favors IM users both under monopolistic case and under horizontal differentiated duopolistic case. When advertising revenue is large enough relatively to marginal cost for serving IM users, IM users can enjoy free service provided by IM operators. The competitive equilibrium of duopolistic case is not necessarily symmetric when advertisers choose singlehoming. Even in the symmetric equilibrium platform would rather deter all advertisers.
Logistics: Price Rises Incurred by High Oil Price

Institute of Scientific and Technical Information of China (English)

Lai Zhihui

2011-01-01

@@ "When the oil price grows by 100%, the logistic indus-try will see a price growth of 40%, while the logistics in-dustry a price rise of 35%, which means every price increase of 5% in the oil price will bring along that of 2% in this industry." said Liu Zongsheng, General Manager of Itochu Logistics Co., Ltd., on the seminar "Focusing on the eco-nomic consequences of raising oil price, interest rate and deposit reserve ratio", which was held recently.
Personnel Policy and Profit

DEFF Research Database (Denmark)

Bingley, Paul; Westergård-Nielsen, Niels Chr.

2004-01-01

personnel structure variation. It is found that personnel policy is strongly related to economic performance. At the margin, more hires are associated with lower profit, and more separations with higher profit. For the average firm, one new job, all else equal, is associated with ?2680 (2000 prices) lower...
Enhancing medicine price transparency through price information mechanisms.

Science.gov (United States)

Hinsch, Michael; Kaddar, Miloud; Schmitt, Sarah

2014-05-08

Medicine price information mechanisms provide an essential tool to countries that seek a better understanding of product availability, market prices and price compositions of individual medicines. To be effective and contribute to cost savings, these mechanisms need to consider prices in their particular contexts when comparing between countries. This article discusses in what ways medicine price information mechanisms can contribute to increased price transparency and how this may affect access to medicines for developing countries. We used data collected during the course of a WHO project focusing on the development of a vaccine price and procurement information mechanism. The project collected information from six medicine price information mechanisms and interviewed data managers and technical experts on key aspects as well as observed market effects of these mechanisms.The reviewed mechanisms were broken down into categories including objective and target audience, as well as the sources, types and volumes of data included. Information provided by the mechanisms was reviewed according to data available on medicine prices, product characteristics, and procurement modalities. We found indications of positive effects on access to medicines resulting from the utilization of the reviewed mechanisms. These include the uptake of higher quality medicines, more favorable results from contract negotiations, changes in national pricing policies, and the decrease of prices in certain segments for countries participating in or deriving data from the various mechanisms. The reviewed mechanisms avoid the methodological challenges observed for medicine price comparisons that only use national price databases. They work with high quality data and display prices in the appropriate context of procurement modalities as well as the peculiarities of purchasing countries. Medicine price information mechanisms respond to the need for increased medicine price transparency and have the
Dynamic Pricing

DEFF Research Database (Denmark)

Sharifi, Reza; Anvari-Moghaddam, Amjad; Fathi, S. Hamid

2017-01-01

Dynamic pricing scheme, also known as real-time pricing (RTP), can be more efficient and technically beneficial than the other price-based schemes (such as flat-rate or time-of-use (TOU) pricing) for enabling demand response (DR) actions. Over the past few years, advantages of RTP-based schemes h...... of dynamic pricing can lead to increased willingness of consumers to participate in DR programs which in turn improve the operation of liberalized electricity markets.......Dynamic pricing scheme, also known as real-time pricing (RTP), can be more efficient and technically beneficial than the other price-based schemes (such as flat-rate or time-of-use (TOU) pricing) for enabling demand response (DR) actions. Over the past few years, advantages of RTP-based schemes...
Standard gasoline and ACPM - First year of the measure of prices liberation

International Nuclear Information System (INIS)

Unidad de Planeacion Minero Energetica, UPME

2000-01-01

At the beginning of 1999, amid a lingering period of low prices of petroleum and relative stability of exchange market, due at the high interest rate levels and it offers of foreign currencies, the national government through the of Mines and Energy Ministry, decided to start the prices liberation for the standard gasoline and ACPM. In that moment, the economic politics of the state pointed to the maintenance of the flow of revenues of the nation, the creation of incentives for the investment of the national and international private capital, the elimination of subsidies of the public sector, the best assignment in the public expense, the construction of an environment competitive and the protection of the real wage of the Colombians. Specifically of liberation measure of the internal prices of standard gasoline and ACPM modified two components of prices structure, entrance to the producer (EP) and margin retailer; to rationalize the finances of Ecopetrol, to achieve a better assignment of the public resources with the elimination from an outline of subsidies to high strata, to look for the specialization of the state company in the exploration, to eliminate the effect that the expectations of increment of prices of hydrocarbons generated on the prices to the consumer index (PCI), to foment the free competition along the production chain and distribution and to improve the quality and covering of the service, by means of the incentive to the investments
Renewable energies and their effect on electricity prices: the case of the German nuclear phase-out

Energy Technology Data Exchange (ETDEWEB)

Comtesse, Daniel; Schroeer, Sebastian

2010-07-01

The aim of this article is to analyze the price effects of the market integration of renewable energies. Previous related studies describe a so-called 'merit order-effect', implying that decreasing electricity prices are caused by an increasing share of renewable energies. However, this is a static effect resulting from the assumption that the existing power plant fleet remains constant. Our contribution is to analyze the long-run price effect of the substitution of renewable energies for existing technologies like nuclear power, coal or gas. This aspect is relevant, since more and more countries increase the share of renewable energies in order to substitute fossil or nuclear power plants. Higher market shares of renewable energies are caused both by their increasing competitiveness and by political actions such as national targets or promotion schemes. Background and Stylized facts Since renewable energies usually have a lower marginal price of electricity generation - which determines the electricity prices at spot markets - their addition to an established power plant fleet consisting of nuclear, coal, lignite and gas power plants leads to lower electricity prices. However, the long-run price effect when fossil or nuclear power plants are substituted remains ambiguous. This is due to the fact that, if compared to fossil and nuclear fuels, renewable energies are characterized by three specific features: firstly, they lack the ability to secure base load. Secondly, they produce energy which is extremely volatile. Thirdly, their marginal costs of production are close to zero. These characteristics are caused by the high dependency of renewable energies on weather conditions. As electricity generation and consumption must happen simultaneously (electricity storage does not pay off yet), power plants with low base load capacity need back-up capacities. Given the actual technological state of the art, these back-up capacities must be fossil or nuclear power
Sociodemographic differences in fast food price sensitivity

Science.gov (United States)

Meyer, Katie A.; Guilkey, David K.; Ng, Shu Wen; Duffey, Kiyah J.; Popkin, Barry M.; Kiefe, Catarina I.; Steffen, Lyn M.; Shikany, James M.; Gordon-Larsen, Penny

2014-01-01

Importance Fiscal food policies (e.g., taxation) are increasingly proposed to improve population-level health, but their impact on health disparities is unknown. Objective We estimated subgroup-specific effects of fast food price changes on fast food consumption and cardio-metabolic outcomes, hypothesizing inverse associations between fast food price with fast food consumption, BMI, and insulin resistance and stronger associations among blacks (vs. whites) and participants with relatively lower education or income. Design 20-year follow-up (5 exams) in a biracial U.S. prospective cohort: Coronary Artery Risk Development in Young Adults (CARDIA) (1985/86–2005/06, baseline n=5,115). Participants Aged 18–30 at baseline; designed for equal recruitment by race (black/white), educational attainment, age, and gender. Exposures Community-level price data from the Council for Community and Economic Research (C2ER) temporally- and geographically-linked to study participants’ home address at each exam. Main outcome and measures Participant-reported number of fast food eating occasions per week; BMI (kg/m2) from clinical assessment of weight and height; homeostatic model assessment insulin resistance (HOMA-IR) from fasting glucose and insulin. Covariates included individual- and community-level social and demographic factors. Results In repeated measures regression, multivariable-adjusted associations between fast food price and consumption were non-linear (quadratic, pconsumption at higher prices; estimates varied according to race (interaction term p=0.04), income (p=0.07), and education (p=0.03). For example, at the 10th percentile of price ($1.25/serving), blacks and whites had mean fast food consumption (times/week) of 2.2 (95% CI: 2.1–2.3) and 1.6 (1.5–1.7), respectively, while at the 90th percentile of price ($1.53/serving), respective mean consumption estimates were 1.9 (1.8–2.0) and 1.5 (1.4–1.6). We observed differential price effects on HOMA
Decrease in oil prices: which consequences for the World economy and for France?

International Nuclear Information System (INIS)

Camatte, Hadrien; Darmet-Cucchiarini, Maxime; Gillet, Thomas; Masson, Emmanuelle; Meslin, Olivier; Padieu, Ysaline; Tavin, Alexandre

2016-04-01

Based of various statistics, this public publication first describes that, since summer 2014, oil price has been sharply decreasing (70 per cent) and keeping on decreasing due to a still abundant supply (with non conventional oil in the USA, and a still high production by OPEC countries) and a rather disappointing demand. It also outlines that production commitments stated by producers are still uncertain. This paper then notices that this oil price decrease could remain positive for World economy, but that some short term factors still impair these effects. This positive effect is indeed slow to appear in importing countries. Negative effects in exporting countries are emphasized by local economic policies. Moreover, there could be a transmission of this oil price decrease to the financial sphere, oil price decrease makes monetary policy more complex, and the USA are increasingly exposed to the energy sector activity. The third part shows that oil prices have positive effects on the French economy. They favour a wealth transfer from the rest of the world to the French economy, positively impacts companies margins and household purchase power on the short and medium terms, induces external effects as it also affects trade partners, and could result in an activity gain in the finance bill
Statistical Studies of Non-price Competition in the Structure of Public Procurement in the Russian Federation

OpenAIRE

Svetlana Aleksandrovna Sergeeva; Alexander Alexandrovich Arionchik

2016-01-01

The principle of securing competition is one of the basic principles of the contract system in public procurement in the Russian Federation. The law on the contract system in procurement stipulates that the contract system in procurement is aimed at creating equal conditions to ensure competition between the parties to procurement. An important aspect is that the competition for procurement should be based on compliance with the principle of fair price and non-price competition. The purpose o...
Transactional price of an expected child and its application in birth control.

Science.gov (United States)

Li, X

1993-01-01

The theoretical presentation of the impact of the transactional price of an expected child (TPEC) on birth control led to the conclusion that successful birth control was a combination of birth utility theory and TPEC theory. In a hypothetical market, the assumption can be made that an expected price can be attached to a desired child or a transactional price can be attached for giving up the reproductive right to have an excess child. A consumer equilibrium model can characterize the changes in financial resources necessary in deciding on an appropriate number of children. In a general equilibrium model, couples would have to be compensated a certain amount as an inducement to forgo the right to have a second child. Prices of children can be determined by a distributional curve of this transactional price of expected excess children and the estimated marginal price for couples with two children. Under circumstances of limited resources, it would be cheaper to buy some couple's rights to forgo a child, and this price would vary with parity. The exact transactional price of each child by parity by each couple could be theoretically determined, if all couples told the truth about desired number of children. However, the complication is that this condition may not be possible, and couples may charge more for forgoing the right to a subsequent child that what they would actually accept. Also, the seller could ask one price and then charge more. A compromise would be to set prices only for lower parities and to set prices subject to the total funds available to the buyer. Very low prices would also decrease the effectiveness of birth control. The government could be a buyer or seller. Taxing couples for additional children would make the government a seller. When the government is the buyer, couples would be compensated for not having an additional child. Another possibility is a reward for having only a certain number of children and a tax for excess children, which
Risk assessment of new pricing strategies in the district heating market. A case study at Sundsvall Energi AB

International Nuclear Information System (INIS)

Bjoerkqvist, Olof; Idefeldt, Jim; Larsson, Aron

2010-01-01

The price structure of district heating has been no major scientific issue for the last decades in energy-related research. However, today trends in district heating pricing tend to move towards a more customer-oriented approach with predetermined prices under a longer periods, leading to a more complex price structure. If a district heating supplier offers district heating with predetermined prices in order to compete with similar electricity offers, the financial risk of the new price structure is significantly higher than the risk of an ordinary variable cost offer based on short-run marginal cost. In contrary to an electricity seller, the district heating company cannot transfer all of the risk of predetermined prices to the financial market, instead the company is thrown upon its own ability to handle the risk by, e.g., hedging its own energy purchase. However, all uncertainties cannot be coped with in this manner. Thus, there is a need for a methodology that can be used to estimate the financial risk of different price structures and to value different opportunities to reduce the risk. In this article, we propose a methodology, implemented in prototype software, to evaluate the risk associated with new price structures in district heating. (author)
Asset Pricing Model and the Liquidity Effect: Empirical Evidence in the Brazilian Stock Market

Directory of Open Access Journals (Sweden)

Otávio Ribeiro de Medeiros

2011-09-01

Full Text Available This paper is aims to analyze whether a liquidity premium exists in the Brazilian stock market. As a second goal, we include liquidity as an extra risk factor in asset pricing models and test whether this factor is priced and whether stock returns were explained not only by systematic risk, as proposed by the CAPM, by Fama and French’s (1993 three-factor model, and by Carhart’s (1997 momentum-factor model, but also by liquidity, as suggested by Amihud and Mendelson (1986. To achieve this, we used stock portfolios and five measures of liquidity. Among the asset pricing models tested, the CAPM was the least capable of explaining returns. We found that the inclusion of size and book-to-market factors in the CAPM, a momentum factor in the three-factor model, and a liquidity factor in the four-factor model improve their explanatory power of portfolio returns. In addition, we found that the five-factor model is marginally superior to the other asset pricing models tested.
Application of the ant colony search algorithm to reactive power pricing in an open electricity market

International Nuclear Information System (INIS)

Ketabi, Abbas; Alibabaee, Ahmad; Feuillet, R.

2010-01-01

Reactive power management is essential to transfer real energy and support power system security. Developing an accurate and feasible method for reactive power pricing is important in the electricity market. In conventional optimal power flow models the production cost of reactive power was ignored. In this paper, the production cost of reactive power and investment cost of capacitor banks were included into the objective function of the OPF problem. Then, using ant colony search algorithm, the optimal problem was solved. Marginal price theory was used for calculation of the cost of active and reactive power at each bus in competitive electric markets. Application of the proposed method on IEEE 14-bus system confirms its validity and effectiveness. Results from several case studies show clearly the effects of various factors on reactive power price. (author)
Hospital and Health Insurance Markets Concentration and Inpatient Hospital Transaction Prices in the U.S. Health Care Market.

Science.gov (United States)

Dauda, Seidu

2018-04-01

To examine the effects of hospital and insurer markets concentration on transaction prices for inpatient hospital services. Measures of hospital and insurer markets concentration derived from American Hospital Association and HealthLeaders-InterStudy data are linked to 2005-2008 inpatient administrative data from Truven Health MarketScan Databases. Uses a reduced-form price equation, controlling for cost and demand shifters and accounting for possible endogeneity of market concentration using instrumental variables (IV) technique. The findings suggest that greater hospital concentration raises prices, whereas greater insurer concentration depresses prices. A hypothetical merger between two of five equally sized hospitals is estimated to increase hospital prices by about 9 percent (p costs. © Published 2017. This article is a U.S. Government work and is in the public domain in the USA.
Oil price volatility and the asymmetric response of gasoline prices to oil price increases and decreases

International Nuclear Information System (INIS)

Radchenko, S.

2005-01-01

This paper analyzes the effect of volatility in oil prices on the degree of asymmetry in the response of gasoline prices to oil price increases and decreases. Several time series measures of the asymmetry between the responses of gasoline prices to oil price increases and decreases and several measures of the oil price volatility are constructed. In all models, the degree of asymmetry in gasoline prices declines with an increase in oil price volatility. The results support the oligopolistic coordination theory as a likely explanation of the observed asymmetry and are not consistent with the standard search theory and the search theory with Bayesian updating. (author)
Lessons from game theory about healthcare system price inflation: evidence from a community-level case study.

Science.gov (United States)

Agee, Mark D; Gates, Zane

2013-02-01

Game theory is useful for identifying conditions under which individual stakeholders in a collective action problem interact in ways that are more cooperative and in the best interest of the collective. The literature applying game theory to healthcare markets predicts that when providers set prices for services autonomously and in a noncooperative fashion, the market will be susceptible to ongoing price inflation. We compare the traditional fee-for-service pricing framework with an alternative framework involving modified doctor, hospital and insurer pricing and incentive strategies. While the fee-for-service framework generally allows providers to set prices autonomously, the alternative framework constrains providers to interact more cooperatively. We use community-level provider and insurer data to compare provider and insurer costs and patient wellness under the traditional and modified pricing frameworks. The alternative pricing framework assumes (i) providers agree to manage all outpatient claims; (ii) the insurer agrees to manage all inpatient clams; and (iii) insurance premiums are tied to patients' healthy behaviours. Consistent with game theory predictions, the more cooperative alternative pricing framework benefits all parties by producing substantially lower administrative costs along with higher profit margins for the providers and the insurer. With insurance premiums tied to consumers' risk-reducing behaviours, the cost of insurance likewise decreases for both the consumer and the insurer.
Pricing strategy for aesthetic surgery: economic analysis of a resident clinic's change in fees.

Science.gov (United States)

Krieger, L M; Shaw, W W

1999-02-01

The laws of microeconomics explain how prices affect consumer purchasing decisions and thus overall revenues and profits. These principles can easily be applied to the behavior aesthetic plastic surgery patients. The UCLA Division of Plastic Surgery resident aesthetics clinic recently offered a radical price change for its services. The effects of this change on demand for services and revenue were tracked. Economic analysis was applied to see if this price change resulted in the maximization of total revenues, or if additional price changes could further optimize them. Economic analysis of pricing involves several steps. The first step is to assess demand. The number of procedures performed by a given practice at different price levels can be plotted to create a demand curve. From this curve, price sensitivities of consumers can be calculated (price elasticity of demand). This information can then be used to determine the pricing level that creates demand for the exact number of procedures that yield optimal revenues. In economic parlance, revenues are maximized by pricing services such that elasticity is equal to 1 (the point of unit elasticity). At the UCLA resident clinic, average total fees per procedure were reduced by 40 percent. This resulted in a 250-percent increase in procedures performed for representative 4-month periods before and after the price change. Net revenues increased by 52 percent. Economic analysis showed that the price elasticity of demand before the price change was 6.2. After the price change it was 1. We conclude that the magnitude of the price change resulted in a fee schedule that yielded the highest possible revenues from the resident clinic. These results show that changes in price do affect total revenue and that the nature of these effects can be understood, predicted, and maximized using the tools of microeconomics.
Significance of post-resection tissue shrinkage on surgical margins of oral squamous cell carcinoma.

Science.gov (United States)

El-Fol, Hossam Abdelkader; Noman, Samer Abduljabar; Beheiri, Mohamed Galal; Khalil, Abdalla M; Kamel, Mahmoud Mohamed

2015-05-01

Resecting oral squamous cell carcinoma (SCC) with an appropriate margin of uninvolved tissue is critical in preventing local recurrence and in making decisions regarding postoperative radiation therapy. This task can be difficult due to the discrepancy between margins measured intraoperatively and those measured microscopically by the pathologist after specimen processing. A total of 61 patients underwent resective surgery with curative intent for primary oral SCC were included in this study. All patients underwent resection of the tumor with a measured 1-cm margin. Specimens were then submitted for processing and reviewing, and histopathologic margins were measured. The closest histopathologic margin was compared with the in situ margin (1 cm) to determine the percentage discrepancy. The mean discrepancy between the in situ margins and the histopathological margins of all close and positive margins were 47.6% for the buccal mucosa (with a P value corresponding to 0.05 equaling 2.1), which is statistically significant, 4.8% for the floor of mouth, 9.5% for the mandibular alveolus, 4.8% for the retromolar trigon, and 33.3% for the tongue. There is a significant difference among resection margins based on tumor anatomical location. Margins shrinkage after resection and processing should be considered at the time of the initial resection. Tumors located in the buccal mucosa show significantly greater discrepancies than tumors at other sites. These findings suggest that it is critical to consider the oral site when outlining margins to ensure adequacy of resection. Buccal SCC is an aggressive disease, and should be considered as an aggressive subsite within the oral cavity, requiring a radical and aggressive resective approach. Copyright © 2015 European Association for Cranio-Maxillo-Facial Surgery. Published by Elsevier Ltd. All rights reserved.
IS THE PRICE RIGHT? PRICING FOR LONG TERM PROFITABILITY

Directory of Open Access Journals (Sweden)

Andrea Erika NYÁRÁDI

2007-01-01

Full Text Available The way how we choose our pricing strategy has a significant impact on company’s success. Nowadays companies more and more adopt a new way of thinking in pricing, namely pricing for a long term period in order to bring higher profitability, to build an efficient pricing strategy. Marketers have only recently begun to focus seriously on effective pricing. These companies are the so called progressive companies. They have begun doing more than just worrying about pricing. To increase profitability many are abandoning traditional reactive pricing procedures in favor of proactive pricing, making explicit corporate decisions to change their focus to growth in top-line sales to growth in profitability. The long-term implications of price strategies are still under-researched, and managers should be aware of shifts in customer reactions that may result from frequent adoption of certain strategies. The company pricing strategy should be seen in relation to developments in the company variables, internal ones (capital strength, competencies, organizational conditions, efficiency of the work force etc. as well as external ones (customers, competitors, the technological development etc., adopting strategic pricing. In this paper I will present the most effective pricing strategies leading to long term profitability, and also suggest practical conditions for pricing strategies to maximize profit in the long run.

Patients' views on price shopping and price transparency.

Science.gov (United States)

Semigran, Hannah L; Gourevitch, Rebecca; Sinaiko, Anna D; Cowling, David; Mehrotra, Ateev

2017-06-01

Driven by the growth of high deductibles and price transparency initiatives, patients are being encouraged to search for prices before seeking care, yet few do so. To understand why this is the case, we interviewed individuals who were offered access to a widely used price transparency website through their employer. Qualitative interviews. We interviewed individuals enrolled in a preferred provider organization product through their health plan about their experience using the price transparency tool (if they had done so), their past medical experiences, and their opinions on shopping for care. All interviews were transcribed and manually coded using a thematic coding guide. In general, respondents expressed frustration with healthcare costs and had a positive opinion of the idea of price shopping in theory, but 2 sets of barriers limited their ability to do so in reality. The first was the salience of searching for price information. For example, respondents recognized that due to their health plan benefits design, they would not save money by switching to a lower-cost provider. Second, other factors were more important than price for respondents when choosing a provider, including quality and loyalty to current providers. We found a disconnect between respondents' enthusiasm for price shopping and their reported use of a price transparency tool to shop for care. However, many did find the tool useful for other purposes, including checking their claims history. Addressing the barriers to price shopping identified by respondents can help inform ongoing and future price transparency initiatives.
Safety Margins and Their Economical Value in a De-regulated Market

International Nuclear Information System (INIS)

Vidard, Michel

2002-01-01

The definition of safety margins is sometimes ambiguous. Depending on assumptions used to evaluate the evolution of plant parameters and on acceptance criteria, the same design could well turn out to have positive, zero, or negative margin for the same operating situation. Very often, considering that an optimized reactor would have to operate with zero margin compared to at least one safety criterion, designers or utilities considered in their analyses penalizing assumptions. This was done for example either considering reduced component capability or very high core peaking factors, the latter generally exceeding by far what would be anticipated in perturbed situations. This approach has three major drawbacks: -having a reasonable understanding of the real importance of safety margins is difficult, -if a non-conservatism is identified in a methodology, there is a high risk of being in a no-compliance situation from a regulatory standpoint, -it leads to a limitation on allowable electrical output and constraints on technical specifications for example. In a regulated market, such a situation can be tolerable as the final customer has to pay the extra financial burden in any case. In a de-regulated market, the situation is significantly different. The final customer can choose his supplier, and is likely to go to those offering the best prices, i.e. those making optimal use of their available resources. There is so a need for better understanding of real plant capabilities. Revisiting assumptions used for evaluating safety margins is so highly recommended, if not imperative, to electricity companies. This will helpful to reshape company strategies in case of evolution of market conditions. (author)
Energy-saving behavior and marginal abatement cost for household CO2 emissions

International Nuclear Information System (INIS)

Hamamoto, Mitsutsugu

2013-01-01

This paper attempts to measure consumers' perceived net benefits (or net costs) of energy-saving measures in using energy-consuming durable goods. Using the estimated net costs and the volume of CO 2 reduced by the measures, a marginal abatement cost (MAC) curve for the average household's CO 2 emissions is produced. An analysis using the curve suggests that in order to provide households with an incentive to take actions that can lead to CO 2 emission reductions in using energy-consuming durables, a high level of carbon price is needed. In addition, a regression analysis reveals that the net benefits of the measures are larger for households that put a higher priority on energy saving, for those living in detached houses, for those with a smaller number of persons living together, and for those with less income. The result of the analysis using the MAC curve may suggest that promoting energy-saving behavior will require not only a policy to provide economic incentives but also interventions to influence psychological factors of household behavior. - Highlights: • Consumers' perceived net costs of energy-saving measures in using energy-consuming durables are measured. • Using the estimated net costs, a marginal abatement cost (MAC) curve for the average household's CO 2 emissions is produced. • A high carbon price is needed in order to provide households with an incentive to take actions for energy-savings. • Households' attributes affecting their energy-saving behavior are revealed by a regression analysis
Carbon pricing, nuclear power and electricity markets

Energy Technology Data Exchange (ETDEWEB)

Cameron, R.; Keppler, J. H. [OECD Nuclear Energy Agency, 12, boulevard des Iles, 92130 Issy-les-Moulineaux (France)

2012-07-01

In 2010, the NEA in conjunction with the International Energy Agency produced an analysis of the Projected Costs of Electricity for almost 200 power plants, covering nuclear, fossil fuel and renewable electricity generation. That analysis used lifetime costs to consider the merits of each technology. However, the lifetime cost analysis is less applicable in liberalised markets and does not look specifically at the viewpoint of the private investor. A follow-up NEA assessment of the competitiveness of nuclear energy against coal- and gas-fired generation under carbon pricing has considered just this question. The economic competition in electricity markets is today between nuclear energy and gas-fired power generation, with coal-fired power generation not being competitive as soon as even modest carbon pricing is introduced. Whether nuclear energy or natural gas comes out ahead in their competition depends on a number of assumptions, which, while all entirely reasonable, yield very different outcomes. The analysis in this study has been developed on the basis of daily data from European power markets over the last five-year period. Three different methodologies, a Profit Analysis looking at historic returns over the past five years, an Investment Analysis projecting the conditions of the past five years over the lifetime of plants and a Carbon Tax Analysis (differentiating the Investment Analysis for different carbon prices) look at the issue of competitiveness from different angles. They show that the competitiveness of nuclear energy depends on a number of variables which in different configurations determine whether electricity produced from nuclear power or from CCGTs generates higher profits for its investors. These are overnight costs, financing costs, gas prices, carbon prices, profit margins (or mark-ups), the amount of coal with carbon capture and electricity prices. This paper will present the outcomes of the analysis in the context of a liberalised
Carbon pricing, nuclear power and electricity markets

International Nuclear Information System (INIS)

Cameron, R.; Keppler, J. H.

2012-01-01

In 2010, the NEA in conjunction with the International Energy Agency produced an analysis of the Projected Costs of Electricity for almost 200 power plants, covering nuclear, fossil fuel and renewable electricity generation. That analysis used lifetime costs to consider the merits of each technology. However, the lifetime cost analysis is less applicable in liberalised markets and does not look specifically at the viewpoint of the private investor. A follow-up NEA assessment of the competitiveness of nuclear energy against coal- and gas-fired generation under carbon pricing has considered just this question. The economic competition in electricity markets is today between nuclear energy and gas-fired power generation, with coal-fired power generation not being competitive as soon as even modest carbon pricing is introduced. Whether nuclear energy or natural gas comes out ahead in their competition depends on a number of assumptions, which, while all entirely reasonable, yield very different outcomes. The analysis in this study has been developed on the basis of daily data from European power markets over the last five-year period. Three different methodologies, a Profit Analysis looking at historic returns over the past five years, an Investment Analysis projecting the conditions of the past five years over the lifetime of plants and a Carbon Tax Analysis (differentiating the Investment Analysis for different carbon prices) look at the issue of competitiveness from different angles. They show that the competitiveness of nuclear energy depends on a number of variables which in different configurations determine whether electricity produced from nuclear power or from CCGTs generates higher profits for its investors. These are overnight costs, financing costs, gas prices, carbon prices, profit margins (or mark-ups), the amount of coal with carbon capture and electricity prices. This paper will present the outcomes of the analysis in the context of a liberalised
Allocating the CO{sub 2} emissions of an oil refinery with Aumann-Shapley prices. A reply

Energy Technology Data Exchange (ETDEWEB)

Pierru, Axel [Economics Department, IFP, 228-232 Avenue Napoleon Bonaparte, 92852 Rueil-Malmaison (France)

2010-05-15

In this reply, I oppose and further debate some of the points raised in Mr. Tehrani's comment (2010). In addition, I show that, when dealing with short-run linear-programming models with not-adjusted-to-demand capacities, Aumann-Shapley prices can be considered as an attempt to recreate long-run marginal costs. (author)
Is the corporate loan market globally integrated? a pricing puzzle

OpenAIRE

Mark S. Carey; Gregory P. Nini

2004-01-01

We offer evidence that interest rate spreads on syndicated loans to corporate borrowers are economically significantly smaller in Europe than in the U.S., other things equal. Differences in borrower, loan and lender characteristics associated with equilibrium mechanisms suggested in the literature do not appear to explain the phenomenon. Borrowers overwhelmingly issue in their natural home market and bank portfolios display significant home "bias." This may explain why pricing discrepancies a...
Towards and Effective Financial Management: Relevance of Dividend Discount Model in Stock Price Valuation

Directory of Open Access Journals (Sweden)

Ana Mugoša

2015-06-01

Full Text Available The aim of this paper is to analyze the relevance of dividend discount model, i.e. its specific form in stock price estimation known as Gordon growth model. The expected dividends can be a measure of cash flows returned to the stockholder. In this context, the model is useful for assessment of how risk factors, such as interest rates and changing inflation rates, affect stock returns. This is especially important in case when investors are value oriented, i.e. when expected dividends are theirmain investing drivers. We compared the estimated with the actual stock price values and tested the statistical significance of price differences in 199 publicly traded European companies for the period2010-2013. Statistical difference between pairs of price series (actual and estimated was tested using Wilcoxon and Kruskal-Wallis tests of median and distribution equality. The hypothesis that Gordon growth model cannot be reliable measure of stock price valuation on European equity market over period of 2010-2013 due to influence of the global financial crisis was rejected with 95% confidence. Gordon growth model has proven to be reliable measure of stock price valuation even over period of strong global financial crisis influence.
Sociodemographic differences in fast food price sensitivity.

Science.gov (United States)

Meyer, Katie A; Guilkey, David K; Ng, Shu Wen; Duffey, Kiyah J; Popkin, Barry M; Kiefe, Catarina I; Steffen, Lyn M; Shikany, James M; Gordon-Larsen, Penny

2014-03-01

Fiscal food policies (eg, taxation) are increasingly proposed to improve population-level health, but their impact on health disparities is unknown. To estimate subgroup-specific effects of fast food price changes on fast food consumption and cardiometabolic outcomes. Twenty-year follow-up (5 examinations) in a biracial US prospective cohort: Coronary Artery Risk Development in Young Adults (CARDIA) (1985/1986-2005/2006, baseline N = 5115). Participants were aged 18 to 30 years at baseline; design indicated equal recruitment by race (black vs white), educational attainment, age, and sex. Community-level price data from the Council for Community and Economic Research were temporally and geographically linked to study participants' home address at each examination. Participant-reported number of fast food eating occasions per week, body mass index (BMI), and homeostasis model assessment insulin resistance (HOMA-IR) from fasting glucose and insulin concentrations. Covariates included individual-level and community-level social and demographic factors. In repeated measures regression analysis, multivariable-adjusted associations between fast food price and consumption were nonlinear (quadratic, P fast food consumption frequency of 2.20 (95% CI, 2.07-2.33) and 1.55 (1.45-1.65) times/wk, respectively, whereas at the 90th percentile of price ($1.53/serving), respective mean consumption estimates were 1.86 (1.75-1.97) and 1.50 (1.41-1.59) times/wk. We observed differential price effects on HOMA-IR (inverse for lower educational status only [interaction P = .005] and at middle income only [interaction P = .02]) and BMI (inverse for blacks, less education, and middle income; positive for whites, more education, and high income [all interaction P fast food price sensitivity on fast food consumption and insulin resistance among sociodemographic groups that have a disproportionate burden of chronic disease. Our findings have implications for fiscal policy, particularly with
Analyzing the effects of past prices on reference price formation

OpenAIRE

van Oest, R.D.; Paap, R.

2004-01-01

textabstractWe propose a new reference price framework for brand choice. In this framework, we employ a Markov-switching process with an absorbing state to model unobserved price recall of households. Reference prices result from the prices households are able to remember. Our model can be used to learn how many prices observed in the past are used for reference price formation. Furthermore, we learn to what extent households have sufficient price knowledge to form an internal reference price...
Estimating the electricity prices, generation costs and CO_2 emissions of large scale wind energy exports from Ireland to Great Britain

International Nuclear Information System (INIS)

Cleary, Brendan; Duffy, Aidan; Bach, Bjarne; Vitina, Aisma; O’Connor, Alan; Conlon, Michael

2016-01-01

The share of wind generation in the Irish and British electricity markets is set to increase by 2020 due to renewable energy (RE) targets. The United Kingdom (UK) and Ireland have set ambitious targets which require 30% and 40% of electricity demand to come from RE, mainly wind, by 2020, respectively. Ireland has sufficient indigenous onshore wind energy resources to exceed the RE target, while the UK faces uncertainty in achieving its target. A possible solution for the UK is to import RE directly from large scale onshore and offshore wind energy projects in Ireland; this possibility has recently been explored by both governments but is currently on hold. Thus, the aim of this paper is to estimate the effects of large scale wind energy in the Irish and British electricity markets in terms of wholesale system marginal prices, total generation costs and CO_2 emissions. The results indicate when the large scale Irish-based wind energy projects are connected directly to the UK there is a decrease of 0.6% and 2% in the Irish and British wholesale system marginal prices under the UK National Grid slow progression scenario, respectively. - Highlights: • Modelling the Irish and British electricity markets. • Investigating the impacts of large scale wind energy within the markets. • Results indicate a reduction in wholesale system marginal prices in both markets. • Decrease in total generation costs and CO_2 emissions in both markets.
Power and pay: The union and equal pay at B. C. Electric/Hydro

Energy Technology Data Exchange (ETDEWEB)

Creese, G

The struggle for equal pay for women in one large office union, the Office and Technical Employees' Union (OTEU), at British Columbia Electric/Hydro is analyzed. The analysis concentrates on the second phase of the equal pay movement that preoccupied the union for over 30 years starting in 1949. Equal pay for equal job-evaluation was finally achieved in 1981, yet this struggle did not produce a subsequent questioning of gender bias within the job evaluation process or the structure of the existing hierarchy of jobs. The study illustrates some of the ways that gender hierarchies and inequities are defined and reinforced by employers seeking to maintain profits by keeping labor costs down, as BC Electric/Hydro resisted eliminating the differential in male and female pay, systematically restructured unequal pay, and continually resorted to lower community standards even when the company's own job evaluation system suggested equal comparators with male jobs. Gendered jobs are also shaped by union practices, as evidenced by the OTEU's role in restructuring the postwar gender division of labor in the late 1940s, as well as their early and persistent challenges to the female differential but, at the same time, the continued marginalization of equal pay as a women's issue rather than a general union issue. 66 refs.
Oil prices and the stock prices of alternative energy companies

International Nuclear Information System (INIS)

Henriques, Irene; Sadorsky, Perry

2008-01-01

Energy security issues coupled with increased concern over the natural environment are driving factors behind oil price movements. While it is widely accepted that rising oil prices are good for the financial performance of alternative energy companies, there has been relatively little statistical work done to measure just how sensitive the financial performance of alternative energy companies are to changes in oil prices. In this paper, a four variable vector autoregression model is developed and estimated in order to investigate the empirical relationship between alternative energy stock prices, technology stock prices, oil prices, and interest rates. Our results show technology stock prices and oil prices each individually Granger cause the stock prices of alternative energy companies. Simulation results show that a shock to technology stock prices has a larger impact on alternative energy stock prices than does a shock to oil prices. These results should be of use to investors, managers and policy makers. (author)
Time variation in European carbon pass-through rates in electricity futures prices

International Nuclear Information System (INIS)

Huisman, Ronald; Kiliç, Mehtap

2015-01-01

The European Union Emissions Trading Scheme is a means to price emission allowances. Electricity market prices should reflect these market prices of emission allowances as they are a cost factor for power producers. The pass-through rate is the fraction of the emission allowance price that is passed through to electricity market prices. It is often measured and presented as an average or a fixed estimate over some time period. However, we expect that the pass-through rates should actually vary over time as electricity supply curves reflect the marginal costs of different producers that differ in emission intensity. We apply a Kalman Filter approach to observe pass-through rates in Germany and U.K. and find strong support for time varying instead of fixed pass-through rates. Although policy makers are interested in the impact of a policy on average, our results indicate that one needs to be careful with the time-frame over which pass-through rates are measured for policy evaluation, as an incorrect chosen evaluation period could cause an under- or overestimation of the pass-through rate. In addition, our model helps to provide policy makers with insight in the development of pass-through rates when market circumstances change with respect to power production. - Highlights: • We analyse the time-variation of the emission pass-through rate in power prices. • We examine historical futures prices for Germany and the U.K. • We test the hypothesis by using the Kalman Filter methodology. • Strong support is found that pass-through rates vary over time. • The chosen time-frame for pass-through rates is important for policy evaluation.
Higher Education Prices and Price Indexes. 1976 Supplement.

Science.gov (United States)

Halstead, Kent D.

The 1976 supplement presents higher education price index data for fiscal years 1971 through 1976. The basic study, "Higher Education Prices and Price Indexes" (ED 123 996) presents complete descriptions of the indexes together with index values and price data for fiscal years 1961 through 1974. Indexes are presented for research and development,…
Assessing the Predictive Power of Customer Satisfaction for Financial and Market Performances: Price-to-Earnings Ratio is a Better Predictor Overall

Directory of Open Access Journals (Sweden)

Pierre Rostan

2012-01-01

Full Text Available Our paper shows that based on the RMSE criteria, Price-to-Earnings ratio is a better predictor of financial and market performances of the firm than the Customer Satisfaction index (CS. This conclusion is based on the choice of five financial and seven market indicators that we consider as proxies for financial and market performances with a sample comprising eighty-six companies: Book value, dividend yield, Gross Profit Margin, Price to Cash-Flows, Price-to-Earnings, Price to Sales, Annual return, ROA, ROE, ROI, Volatility and Tobin’s Q. However, CS clearly outperforms our five benchmarks (Tobin’s Q, Price-to-Cash Flows, Price-to-Earnings, Volatility or the indicator itself when forecasting Tobin’s Q, Volatility, ROE and ROI. In periods of volatile market such as year 2008, CS is a more stable predictor of Volatility or ROE than the indicators themselves (i.e. Volatility for Volatility, ROE for ROE.
Another look on the relationships between oil prices and energy prices

International Nuclear Information System (INIS)

Lahiani, Amine; Miloudi, Anthony; Benkraiem, Ramzi; Shahbaz, Muhammad

2017-01-01

This paper employs the Quantile Autoregressive Distributed Lags (QARDL) model developed recently by Cho et al. (2015) to investigate the pass-through of oil prices to a set of energy prices. This approach allows analyzing simultaneously short-term connections and long-run cointegrating relationships across a range of quantiles. It also provides insights on the short-run predictive power of oil prices in predicting energy prices while accounting for the cointegration between oil prices and each of the considered energy prices in low, medium and high quantiles. Two key findings emerge from this paper. First, all considered energy prices are shown to be cointegrated with oil price across quantiles meaning that a stationaryequilibriumrelationship exists between single energy price and oil price. Second, we find evidence that oil price is a significant predictor of individual petroleum products prices and natural gas in the short run. This paper has important policy implications for forecasters, energy policy-makers and portfolio managers. - Highlights: • The pass-through of oil prices to a set of energy prices is investigated for US economy. • All considered energy prices are shown to be cointegrated with oil price across quantiles. • Oil price is a significant predictor of individual petroleum products prices in the short run. • Oil price also predicts natural gas prices in the short run.
Analysis of health sector gender equality and social inclusion strategy 2009 of Nepal.

Science.gov (United States)

Mahara, G B; Dhital, S R

2014-01-01

The policy on gender equality and social inclusion (GESI) in health sector of Nepal is formulated in 2009 targeting toward poor, vulnerable, marginalized social and ethnic groups. Gender inequality and social discrimination are a social problem that affect on individual health finally. The main objective of this paper is to critically analysis and evaluates the Government's strategy on health sector gender equality and social inclusion in Nepal. We collected published and unpublished information assessing the public health, policy analysis and research needs from different sources. A different policy approaches for the analysis and evaluation of GESI strategies is applied in this paper. Universal education, community participation, individual, group and mass communication approaches, and social capital are the key aspects of effective implementation of policy at target levels.
Price, Weather, and `Acreage Abandonment' in Western Great Plains Wheat Culture.

Science.gov (United States)

Michaels, Patrick J.

1983-07-01

Multivariate analyses of acreage abandonment patterns in the U.S. Great Plains winter wheat region indicate that the major mode of variation is an in-phase oscillation confined to the western half of the overall area, which is also the area with lowest average yields. This is one of the more agroclimatically marginal environments in the United States, with wide interannual fluctuations in both climate and profitability.We developed a multiple regression model to determine the relative roles of weather and expected price in the decision not to harvest. The overall model explained 77% of the spatial and temporal variation in abandonment. The 36.5% of the non-spatial variation was explained by two simple transformations of climatic data from three monthly aggregates-September-October, November-February and March-April. Price factors, expressed as indexed future delivery quotations,were barely significant, with only between 3 and 5% of the non-spatial variation explained, depending upon the model.The model was based upon weather, climate and price data from 1932 through 1975. It was tested by sequentially withholding three-year blocks of data, and using the respecified regression coefficients, along with observed weather and price, to estimate abandonment in the withheld years. Error analyses indicate no loss of model fidelity in the test mode. Also, prediction errors in the 1970-75 period, characterized by widely fluctuating prices, were not different from those in the rest of the model.The overall results suggest that the perceived quality of the crop, as influenced by weather, is a much more important determinant of the abandonment decision than are expected returns based upon price considerations.
The impact of the EU emissions trading scheme on the price of electricity in the Netherlands

International Nuclear Information System (INIS)

Sijm, J.P.M.

2004-02-01

In this paper a specific aspect of the proposed EU Emissions Trading System (EU ETS) is discussed, namely the potential impact of the EU ETS on the price of electricity in the Netherlands and, hence, the potential implications for Dutch power producers and consumers. It shows that the EU ETS may lead to a significant increase in the price of electricity in the Netherlands (and other EU Member States), depending on the marginal costs of emissions trading (i.e. the price of an emission allowance), the emission factor of the marginal production technology to generate electricity, and the extent to which the costs of emissions trading will be passed on to the end-users of electricity. If, for one reason or another, these costs will not be passed on to power consumers, it will have an adverse impact on overall efficiency from both an energy and economic point of view. On the other hand, if - as expected - these costs are indeed passed on to end-users of electricity, it will benefit power producers (mainly owing to the economic rent of allocating emission allowances for free), while it will harm those energy-intensive industries that, in turn, are not able to pass the higher electricity costs to their customers (resulting in a loss of economic production and income). To some degree, these effects can be best avoided by auctioning emission allowances mandatory throughout the EU ETS and using the auction revenues to reduce the overall level of taxation and social premiums in order to improve the overall competitiveness of domestic industries and to (partly) compensate power consumers for the ET-induced increase in the price of electricity

A dual theory of price and value in a meso-scale economic model with stochastic profit rate

Science.gov (United States)

Greenblatt, R. E.

2014-12-01

The problem of commodity price determination in a market-based, capitalist economy has a long and contentious history. Neoclassical microeconomic theories are based typically on marginal utility assumptions, while classical macroeconomic theories tend to be value-based. In the current work, I study a simplified meso-scale model of a commodity capitalist economy. The production/exchange model is represented by a network whose nodes are firms, workers, capitalists, and markets, and whose directed edges represent physical or monetary flows. A pair of multivariate linear equations with stochastic input parameters represent physical (supply/demand) and monetary (income/expense) balance. The input parameters yield a non-degenerate profit rate distribution across firms. Labor time and price are found to be eigenvector solutions to the respective balance equations. A simple relation is derived relating the expected value of commodity price to commodity labor content. Results of Monte Carlo simulations are consistent with the stochastic price/labor content relation.
Pricing Mining Concessions Based on Combined Multinomial Pricing Model

Directory of Open Access Journals (Sweden)

Chang Xiao

2017-01-01

Full Text Available A combined multinomial pricing model is proposed for pricing mining concession in which the annualized volatility of the price of mineral products follows a multinomial distribution. First, a combined multinomial pricing model is proposed which consists of binomial pricing models calculated according to different volatility values. Second, a method is provided to calculate the annualized volatility and the distribution. Third, the value of convenience yields is calculated based on the relationship between the futures price and the spot price. The notion of convenience yields is used to adjust our model as well. Based on an empirical study of a Chinese copper mine concession, we verify that our model is easy to use and better than the model with constant volatility when considering the changing annualized volatility of the price of the mineral product.
The impact of electricity price changes on industrial prices and the general price level in Korea

International Nuclear Information System (INIS)

Lim, Seul-Ye; Yoo, Seung-Hoon

2013-01-01

Electricity has played an important role in the economic development of Korea and, thus, has become a critical factor in sustaining the well-being of the Korean people. This study attempts to investigate the impact of electricity price changes on industrial prices and the general price level using input–output (I–O) analysis. To this end, we apply the I–O price model to the 2011 I–O table recently produced by the Bank of Korea, paying particular attention to the electricity sector by considering it as exogenous and then investigating its impacts. The impacts of the electricity price changes on each industrial sector's prices and the general price level are quantitatively derived. For example, the overall impact of a 10% increase in electricity price on the Korean national economy is estimated to be 0.4367%. We also report the results from the model with the electricity sector endogenous and the model with endogenous electricity and labor sectors. This information can be usefully utilized in decision-making regarding price management for electricity. - Highlights: • We investigate the impact of electricity price changes on the Korean economy. • We use the input–output (I–O) analysis specifying the electricity sector as exogenous. • We apply the I–O price model to 2010 I–O table produced by the Bank of Korea. • The impact of a 10% increase in electricity price on the Korean economy is 0.2176%
Market power and price structure in the electricity market; Markedsmakt og prisstruktur i kraftmarkedet

Energy Technology Data Exchange (ETDEWEB)

Halseth, Arve

1998-12-01

This report evaluates the importance of market power on price formation and price structure in the Norwegian electricity market. A simple oligopoly model is used to show how the equilibrium is affected by demand, distribution of capacity between two major suppliers, and marginal production costs, given that the suppliers do not cooperate. Two important conclusions can be drawn from the calculations: (1) a high concentration on the supply side does not necessarily lead to essential market power, and (2) market power may contribute to increased stability and predictability. The main conclusion is that market power can be positive for society and it is not uniquely associated with a high concentration on the supply side. If emphasis is placed on stability and predictability, market power should not be defined as deviation from prices under free competition but rather should be related to the requirement that the suppliers should not obtain unreasonably high profit with unreasonably little utilization of capacity. 10 refs., 11 figs.
The world market for soybeans: price transmission into Brazil and effects from the timing of crop and trade

Directory of Open Access Journals (Sweden)

Frederico A. Turolla

2007-08-01

Full Text Available This paper investigates the price transmission in the world market for soybeans using time series econometrics models. The theoretical model developed by Mundlack and Larson (1992 is based on the Law of the One Price, which assumes price equalization across all local markets in the long run and allows for deviations in the short run. The international market was characterized by three relevant soybean prices: Rotterdam Port, Argentina and the United States. The paper estimates the elasticity of transmission of these prices into soybean prices in Brazil. There were carried causality and cointegration tests in order to identify whether there is significant long-term relationship among these variables. There was also calculated the impulse-response function and forecast error variance decomposition to analyze the transmission of variations in the international prices over Brazilian prices. An exogeneity test was also carried out so as to check whether the variables respond to short term deviations from equilibrium values. Results validated the Law of the One Price in the long run. In line with many studies, this paper showed that Brazil and Argentina can be seen as price takers as long as the speed of their adjustment to shocks is faster than in the United States, the latter being a price maker.
Common long-range dependence in a panel of hourly Nord Pool electricity prices and loads

DEFF Research Database (Denmark)

Ergemen, Yunus Emre; Haldrup, Niels; Rodríguez-Caballero, Carlos Vladimir

to strong seasonal periodicity, and along the cross-sectional dimension, i.e. the hours of the day, there is a strong dependence which necessarily has to be accounted for in order to avoid spurious inference when focusing on the time series dependence alone. The long-range dependence is modelled in terms...... of a fractionally integrated panel data model and it is shown that both prices and loads consist of common factors with long memory and with loadings that vary considerably during the day. Due to the competitiveness of the Nordic power market the aggregate supply curve approximates well the marginal costs...... data approaches to analyse the time series and the cross-sectional dependence of hourly Nord Pool electricity spot prices and loads for the period 2000-2013. Hourly electricity prices and loads data are characterized by strong serial long-range dependence in the time series dimension in addition...
Price fairness

OpenAIRE

Diller, Hermann

2013-01-01

Purpose – The purpose of this article is to integrate the various strands of fair price research into a concise conceptual model. Design/methodology/approach – The proposed price fairness model is based on a review of the fair pricing literature, incorporating research reported in not only English but also German. Findings – The proposed fair price model depicts seven components of a fair price: distributive fairness, consistent behaviour, personal respect and regard for the partner, fair dea...
Joint decision of pricing and order quantity by considering product substitution in dual channel supply chain

Science.gov (United States)

Widodo, Erwin

2017-11-01

Dual channel supply chain (DCSC) has been attracting many researchers' attention. Their contributions mainly are in two folds, namely pricing problem and inventory policy. However, research to address both pricing and inventory problems simultaneously are still scarce. Meanwhile in recent competitive market, product substitution is an unavoidable practice in fulfilling customer demand when the main product is unavailable. Thus how to decide price and order quantity by considering product substitution under DCSC setting is an interesting topic to address. In this paper, corresponding mathematical model incorporating such problem is proposed. This model consists of objective function measuring sales revenue and inventory cost, and some constraints to assure positive profit margin, interplaying price between online and offline channel, and positive demand. Two pricing schemes, namely Vertical Nash and Stackelberg Leadership are evaluated. The result shows that in any situation of substitution level, Vertical Nash solution provides higher financial performance than that under Stackelberg Leadership. In addition, this work's results have also revealed that there exist some threshold values differentiating when it is better off to apply Vertical Nash scenario an, when Stackelberg Leadership scenario is preferable.
Effect of oil price on Nigeria’s food price volatility

Directory of Open Access Journals (Sweden)

Ijeoma C. Nwoko

2016-12-01

Full Text Available This study examines the effect of oil price on the volatility of food price in Nigeria. It specifically considers the long-run, short-run, and causal relationship between these variables. Annual data on oil price and individual prices of maize, rice, sorghum, soya beans, and wheat spanning from 2000 to 2013 were used. The price volatility for each crop was obtained using Generalized Autoregressive Conditional Heteroskedascity (GARCH (1, 1 model. Our measure of oil price is the Refiner acquisition cost of imported crude oil. The Augmented Dickey–Fuller and Phillip–Perron unit root tests show that all the variables are integrated of order one, I (1. Therefore, we use the Johansen co-integration test to examine the long-run relationship. Our results show that there is no long-run relationship between oil price and any of the individual food price volatility. Thus, we implement a VAR instead of a VECM to investigate the short-run relationship. The VAR model result revealed a positive and significant short-run relationship between oil price and each of the selected food price volatility with exception of that of rice and wheat price volatility. These results were further confirmed by the impulse response functions. The Granger causality test result indicates a unidirectional causality from oil price to maize, soya bean, and sorghum price volatilities but does not show such relationship for rice and wheat price volatilities. We draw some policy implications of these findings.
Delivered Pricing, FOB Pricing, and Collusion in Spatial Markets

OpenAIRE

Maria Paz Espinosa

1992-01-01

This article examines price discrimination and collusion in spatial markets. The problem is analyzed in the context of a repeated duopoly game. I conclude that the prevailing pricing systems depend on the structural elements of the market. Delivered pricing systems emerge in equilibrium in highly monopolistic and highly competitive industries, while FOB is used in intermediate market structures. The fact driving this result is that delivered pricing policies allow spatial price discrimination...
Description and discussion of governmental participations for companies producing oil and gas in marginal fields; Descricao e discussao do regime tributario e participacoes governamentais para empresas produtoras de petroleo e gas em campos marginais

Energy Technology Data Exchange (ETDEWEB)

Eduardo, Antonio Sergio [Universidade Salvador (UNIFACS), BA (Brazil); Rodrigues, Jose Allankardec Fernandes [Universidade do Estado da Bahia (UNEB), Salvador, BA (Brazil); Rodrigues, Livia da Silva Modesto [Universidade do Estado da Bahia (UNEB), Salvador, BA (Brazil); Universidade Salvador (UNIFACS), BA (Brazil); Fundacao Visconde de Cairu, Salvador, BA (Brazil); Ferreira, Doneivan Fernandes [Universidade Federal da Bahia (UFBA), Salvador, BA (Brazil)

2012-07-01

This article reports taxing and government participation in oil and gas extraction in peripheral fields as defined by the Agencia Nacional de Petroleo, Gas Natural e Combustivel (ANP) and the need to discuss the essence of the contributing capacity as a means to take into account the characteristics of this specific niche in gas and oil production. Their own particular policies distinguish them from other segments. The analysis is founded on the Aristotelian view which treats equals equally and unequals unequally. The analysis shows these companies' present situation and makes it clear that taxing in Brazil acts as an obstacle to the development of several sectors, including the small oil and gas production sector. Also worth mentioning is, besides taxes in the oil business, there is also the incidence of financial indemnity established by the Petroleum Law, illustrating an analysis of this legislation. Initially, when peripheral fields are still seen as great opportunities (according to the regulatory definition adopted by the ANP), mainly because of the high price of the barrel of oil (over US$ 100 ) the weight of taxes may not be a critical factor. However, when marginal oil wells do not attract interest in the average independent producer, the only mechanisms capable of extending the activity, and as a consequence, the positive impacts generated in producing communities, may well be tax relief and government involvement. The method used was a reference research and technical visits to leasers of concessions at peripheral fields. The present study will continue with the object of showing econometric models by simulating the impact taxing has on marginal production projects at different stages of maturity. (author)
Pricing and Trust

DEFF Research Database (Denmark)

Huck, Steffen; Ruchala, Gabriele K.; Tyran, Jean-Robert

-competitive (monopolistic) markets. We then introduce a regulated intermediate price above the oligopoly price and below the monopoly price. The effect in monopolies is more or less in line with standard intuition. As price falls volume increases and so does quality, such that overall efficiency is raised by 50%. However......We experimentally examine the effects of flexible and fixed prices in markets for experience goods in which demand is driven by trust. With flexible prices, we observe low prices and high quality in competitive (oligopolistic) markets, and high prices coupled with low quality in non...
The Hotelling Principle, backwardation of futures prices and the values of developed petroleum reserves. The production constraint hypothesis

International Nuclear Information System (INIS)

Thompson, A.C.

2001-01-01

We explore the practitioner-stylized facts that petroleum wells require large initial investments, have daily production capacities, and have small marginal costs for production rates meaningfully below these capacities. Long-run backwardation of futures prices is required to induce drilling new wells. In contrast to Miller and Upton (1985a,b) and Litzenberger and Rabinowitz (1995), production from developed reserves is essentially a corner solution at capacity regardless of backwardation or price volatility. Economically interesting supply decisions take the form of investment in exploration and drilling. Empirical evidence strongly rejects the Miller and Upton hypothesis in favor of our more general model
Why do we price electricity the way we do? Canadian policy in the light of political-economic theories of governmental behaviour

International Nuclear Information System (INIS)

Cairns, R.D.; Heyes, A.G.

1993-01-01

In the past few decades, Canadian crown electrical utilities have exhausted available economies of scale. At marginal cost prices, the utilities could recover costs and even a rent. Yet the available rents have not been collected through economically efficient pricing, but distributed to consumers through low prices. An economically preferred pricing method, known as second-best pricing, is formulated in which there are rents to the hydro resource but these rents are distributed to consumers through the pricing of the product rather than collected by the crown owner of the resource. The model assumes three types of demand: households with different annual incomes which are dependent on the profits of the other two types; small industrial or commercial firms; and large industrial firms. Revenues from the different demand classes are assumed to take the form of two-part tariffs. The pricing policies of crown utilities are discussed, with an emphasis on Hydro-Quebec, and the results of the model are used as informal tests of various theories of public decisionmaking. Most theories provide a partial explanation, but no theory provides a complete explanation of pricing behavior. 24 refs
The effect of pricing level to the loss of welfare costs (case study: Indonesia region II water company)

Science.gov (United States)

K, B. Rosalina E. W.; Gravitiani, E.; Raharjo, M.; Mulyaningsih, T.

2018-03-01

Climate change makes the water balance composition being unstable, both quality and quantity. As a company which responsible for water management, Regional Drinking Water Company (abbreviated as PDAM) is often unable to solve the problem. Welfare costs are indicators to evaluate the economic efficiency. This study aims to calculate the welfare cost of the people lost due to the price determination of PDAM Indonesia in region II with deadweight loss (DWL) approach, so it can provide information to pricing regulator, pricing decision makers and for coIDRorate management. DWL is a loss of economic efficiency that can occur when equilibrium for a good or a service is not achieved, caused by monopoly pricing of artificial scarcity, an externality, a tax or subsidy, or a binding price ceiling or price floor such as a minimum wage. Results showed that the pricing rules set by PDAM yielded different DWL, depending on margin set by the company DWL PDAM ranges between IDR 260,485.66/M3 to IDR 127,486,709.86/M3 which is actually shared to improve the welfare of customers, other communities, and PDAM itself. Data analysis used PDAM performance in 2015 that have not Good CoIDRorate Governance Management and Efficiency.
Dynamic cyclical comovements of oil prices with industrial production, consumer prices, unemployment, and stock prices

International Nuclear Information System (INIS)

Ewing, Bradley T.; Thompson, Mark A.

2007-01-01

This paper examines the empirical relationship between oil prices and several key macroeconomic variables. In particular, we investigate the cyclical comovements of crude oil prices with output, consumer prices, unemployment, and stock prices. The methodology involves the use of the Hodrick-Prescott [Hodrick, R.J., Prescott, E.C., 1980. Post-War US Business Cycles: An Empirical Investigation. Working Paper, Carnegie Mellon University] and Baxter-King [Baxter, M., King, R.G., 1999. Measuring business cycles: approximate band-pass filters for economic time series. Review of Economics and Statistics 81, 575-593] filters, as well as the recently developed full-sample asymmetric Christiano-Fitzgerald [Christiano, L.J., Fitzgerald, T.J., 2003. The band pass filter. International Economic Review 44, 435-465] band-pass filter. Contemporaneous and cross-correlation estimates are made using the stationary cyclical components of the time series to make inference about the degree to which oil prices move with the cycle. Besides documenting a number of important cyclical relationships using three different time series filtering methods, the results suggest that crude oil prices are procyclical and lag industrial production. Additionally, we find that oil prices lead consumer prices. (author)
Energy prices and agricultural commodity prices: Testing correlation using copulas method

International Nuclear Information System (INIS)

Koirala, Krishna H.; Mishra, Ashok K.; D'Antoni, Jeremy M.; Mehlhorn, Joey E.

2015-01-01

The linear relationships between energy prices and prices for agricultural commodities such as corn and soybeans may have been affected, over the last several years, by policy legislations in the farm sector, the Energy Independence and Security Act of 2007, and the Renewable Fuel Standard Program for 2014. Using high-frequency data and newer methodology, this study investigates dependence between agricultural commodity futures prices and energy futures prices. Results reveal that agricultural commodity and energy future prices are highly correlated and exhibit positive and significant relationship. Findings from this study highlight that an increase in energy price increases the price of agricultural commodities. - Highlights: • Energy policy mandates production of 15 billion gallons of corn ethanol by 2015. • Energy-intensive agriculture has a link between energy sector and crop production costs. • We investigate correlation between energy prices and agricultural commodity prices. • Agricultural commodity and energy future prices are highly correlated. • Increase in energy price increases the price of agricultural commodity
Impact of European pharmaceutical price regulation on generic price competition: a review.

Science.gov (United States)

Puig-Junoy, Jaume

2010-01-01

Although economic theory indicates that it should not be necessary to intervene in the generic drug market through price regulation, most EU countries intervene in this market, both by regulating the maximum sale price of generics (price cap) and by setting the maximum reimbursement rate, especially by means of reference pricing systems. We analyse current knowledge of the impact of direct price-cap regulation of generic drugs and the implementation of systems regulating the reimbursement rate, particularly through reference pricing and similar tools, on dynamic price competition between generic competitors in Europe. A literature search was carried out in the EconLit and PubMed databases, and on Google Scholar. The search included papers published in English or Spanish between January 2000 and July 2009. Inclusion criteria included that studies had to present empirical results of a quantitative nature for EU countries of the impact of price capping and/or regulation of the reimbursement rate (reference pricing or similar systems) on price dynamics, corresponding to pharmacy sales, in the generic drug market. The available evidence indicates that price-cap regulation leads to a levelling off of generic prices at a higher level than would occur in the absence of this regulation. Reference pricing systems cause an obvious and almost compulsory reduction in the consumer price of all pharmaceuticals subject to this system, to a varying degree in different countries and periods, the reduction being greater for originator-branded drugs than for generics. In several countries with a reference pricing system, it was observed that generics with a consumer price lower than the reference price do not undergo price reductions until the reference price is reduced, even when there are other lower-priced generics on the market (absence of price competition below the reference price). Beyond the price reduction forced by the price-cap and/or reference pricing regulation itself
Gender equality and equal opportunity mechanisms in Italy

Directory of Open Access Journals (Sweden)

Mršević Zorica

2007-01-01

Full Text Available As a country of Southern European mentality Italy may be taken as the nearest-to-the-Balkans model of the gender equality mechanisms and necessity of their existence. Italy also might be taken as a model of domain and methods of functioning of the gender equality mechanisms as well as their connections with the EU development funds. Besides the Italian Ministry for Rights and Equal opportunities and the National Committee, the attention was paid to the whole range of local mechanisms and legal regulations dealing with advancement of women’s employment and counteracting discrimination on the labor market. In the text are analyzed through the five chapters the Italian mechanisms/institutions for gender equality as located within the European institutional environment but also within the context of Italian recent history of struggle against gender based discrimination. It was stressed that the essence of the accumulated European institutional wisdom is in diversity of the gender equality bodies rather then in their uniformity. Although the Italian mechanisms for gender equality are part of the European institutional environment their aim is to meet the internal needs for advancement of gender equality. Besides, the mechanisms also meet the demands of the international standards comprised in the documents issued by the UN and the EU. In European countries these mechanisms are frequently established and function in the domains of the labor and employment regulations, but also are located within the human rights portfolios while somewhere are connected with the minority rights and equal opportunity implementation.
Understanding Price Controls and Non-Price Competition with Matching Theory

OpenAIRE

Hatfield, John William; Plott, Charles R.; Tanaka, Tomomi

2012-01-01

We develop a quality competition model to understand how price controls affect market outcomes in buyer-seller markets with discrete goods of varying quality. While competitive equilibria do not necessarily exist in such markets when price controls are imposed, we show that stable outcomes do exist and characterize the set of stable outcomes in the presence of price restrictions. In particular, we show that price controls induce non-price competition: price floors induce the trade of ineffici...

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