WorldWideScience

Sample records for prices costs margins

  1. 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

  2. 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.

  3. 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

  4. 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.

  5. 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

  6. 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 ...

  7. 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

  8. 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)

  9. 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

  10. 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...

  11. 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.

  12. 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.

  13. 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

  14. 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.

  15. 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.

  16. 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)

  17. 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.

  18. 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...

  19. 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

  20. 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.

  1. 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

  2. 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...

  3. 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

  4. 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...

  5. 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.

  6. 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

  7. 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

  8. 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.

  9. 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)

  10. 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, ...

  11. 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.

  12. 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)

  13. 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

  14. 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...

  15. 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

  16. 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

  17. 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

  18. 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.

  19. 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, ...

  20. 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...

  1. 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…

  2. 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)

  3. 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

  4. 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.

  5. 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.

  6. 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.)

  7. 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)

  8. 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

  9. 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

  10. 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

  11. 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.

  12. 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.)

  13. 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...

  14. 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)

  15. 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

  16. 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.

  17. 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.

  18. 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” ...

  19. 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)

  20. 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)

  1. 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)

  2. 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

  3. 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)

  4. Marginal costs for intensified energy-efficiency measures

    International Nuclear Information System (INIS)

    Jakob, J.; Jochem, E.; Christen, K.

    2002-01-01

    The costs and benefits of investments in measures designed to improve the energy efficiency of residential buildings (in particular investments in heat insulation) were calculated as a function of increasing energy efficiency for new and renovated buildings and for single-family homes and apartment buildings. These investments in measures to improve efficiency mostly involve with the building envelope and ventilation systems and aim to successively reduce the space-heating needs of the buildings. The measures range from present-day building and renovation methods through to the 'Minergie' and 'Passive House' ('Minergie-P' in Switzerland) standards for low and very-low energy consumption buildings. Cost-benefit ratios were determined for individual building components, individual building concepts and for the whole of Switzerland, using both the average-cost as well as the pure marginal-cost methods (energy-economics level). The collection of empirical data (especially on costs) was an integral and important part of the project. The marginal costs were then compared with the benefits arising from the costs for space heating that were avoided, and, using a few typical cases as examples, with the so-called co-benefits, which are to be implemented in part by private persons and companies. For their quantification, methods were developed and used in case studies; in addition, avoided external costs are also considered. The marginal costs were also calculated for periods of time in the future, whereby they were made dynamic, according to their share of innovation, using the learning-curve method (learning and scaling effects). As far as the findings are concerned, there can be no doubt that the potential to be opened up for increasing energy efficiency using heat insulation measures is high, both for renovations and new construction work. A large portion of this potential is already economically viable and even more so when the possible risks of energy price increases

  5. 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.

  6. Marginal abatement cost curves for Heavy Duty Vehicles. Background report

    Energy Technology Data Exchange (ETDEWEB)

    Schroten, A.; Warringa, G.; Bles, M.

    2012-09-15

    Cost curves were calculated for CO2 abatement technologies for Heavy Duty Vehicles. These curves were elaborated for eight different vehicle categories (six categories of truck and two subcategories), as well as for an 'average' truck and bus. Given that cost curves depend very much on underlying assumptions, the MACH model (Marginal Abatement Costs of Heavy duty vehicles) was developed. This model allows users to enter their own assumptions with respect to parameters like fuel prices and cost and lifetime of individual technologies, with the model then generating new cost curves for the various vehicle categories. This background report contains a description of the model and a summary of the results of several model runs.

  7. 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)

  8. 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)

  9. 48 CFR 570.110 - Cost or pricing data and information other than cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ... 48 Federal Acquisition Regulations System 4 2010-10-01 2010-10-01 false Cost or pricing data and information other than cost or pricing data. 570.110 Section 570.110 Federal Acquisition Regulations System... PROPERTY General 570.110 Cost or pricing data and information other than cost or pricing data. (a) The...

  10. 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%

  11. 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.

  12. 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...

  13. 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.

  14. 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

  15. Workers' marginal costs of commuting

    DEFF Research Database (Denmark)

    van Ommeren, Jos; Fosgerau, Mogens

    2009-01-01

    This paper applies a dynamic search model to estimate workers' marginal costs of commuting, including monetary and time costs. Using data on workers' job search activity as well as moving behaviour, for the Netherlands, we provide evidence that, on average, workers' marginal costs of one hour...

  16. Estimation of marginal costs at existing waste treatment facilities.

    Science.gov (United States)

    Martinez-Sanchez, Veronica; Hulgaard, Tore; Hindsgaul, Claus; Riber, Christian; Kamuk, Bettina; Astrup, Thomas F

    2016-04-01

    This investigation aims at providing an improved basis for assessing economic consequences of alternative Solid Waste Management (SWM) strategies for existing waste facilities. A bottom-up methodology was developed to determine marginal costs in existing facilities due to changes in the SWM system, based on the determination of average costs in such waste facilities as function of key facility and waste compositional parameters. The applicability of the method was demonstrated through a case study including two existing Waste-to-Energy (WtE) facilities, one with co-generation of heat and power (CHP) and another with only power generation (Power), affected by diversion strategies of five waste fractions (fibres, plastic, metals, organics and glass), named "target fractions". The study assumed three possible responses to waste diversion in the WtE facilities: (i) biomass was added to maintain a constant thermal load, (ii) Refused-Derived-Fuel (RDF) was included to maintain a constant thermal load, or (iii) no reaction occurred resulting in a reduced waste throughput without full utilization of the facility capacity. Results demonstrated that marginal costs of diversion from WtE were up to eleven times larger than average costs and dependent on the response in the WtE plant. Marginal cost of diversion were between 39 and 287 € Mg(-1) target fraction when biomass was added in a CHP (from 34 to 303 € Mg(-1) target fraction in the only Power case), between -2 and 300 € Mg(-1) target fraction when RDF was added in a CHP (from -2 to 294 € Mg(-1) target fraction in the only Power case) and between 40 and 303 € Mg(-1) target fraction when no reaction happened in a CHP (from 35 to 296 € Mg(-1) target fraction in the only Power case). Although average costs at WtE facilities were highly influenced by energy selling prices, marginal costs were not (provided a response was initiated at the WtE to keep constant the utilized thermal capacity). Failing to systematically

  17. 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.

  18. 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.

  19. Cost and Price Collaboration

    Science.gov (United States)

    2016-04-30

    described below which relies on questionnaires administered to subject matter experts in both cost analysis and price analysis to determine the value of...additional reports or data that the price analyst used in determining their final negotiated position. The cost analyst section of the questionnaire...an analysis at the individual element level rather than at a total price level to determine the major changes from the awarded contract to the new

  20. 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.

  1. 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

  2. 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.

  3. 48 CFR 239.7406 - Cost or pricing data and information other than cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ... 48 Federal Acquisition Regulations System 3 2010-10-01 2010-10-01 false Cost or pricing data and information other than cost or pricing data. 239.7406 Section 239.7406 Federal Acquisition Regulations System... ACQUISITION OF INFORMATION TECHNOLOGY Telecommunications Services 239.7406 Cost or pricing data and...

  4. 48 CFR 52.215-21 - Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing...

    Science.gov (United States)

    2010-10-01

    ... Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data-Modifications. 52.215-21... Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data... Pricing Data and Data Other Than Certified Cost or Pricing Data—Modifications (OCT 2010) (a) Exceptions...

  5. 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.

  6. Marginal cost application in the power industry

    International Nuclear Information System (INIS)

    Twardy, L.; Rusak, H.

    1994-01-01

    Two kind of marginal costs, the short-run and the long-run, are defined. The former are applied in conditions when the load increase is not accompanied neither by the increase of the transmission capacity not the installed capacity while the latter assume new investments to expand the power system. The long-run marginal costs be used to forecast optimized development of the system. They contain two main components: the marginal costs of capacity and the marginal costs of energy. When the long-run marginal costs are calculated, each component is considered for particular voltage levels, seasons of the year, hours of the day - selected depending on the system reliability factor as well as on its load level. In the market economy countries the long-run marginal costs can be used for setting up the electric energy tariffs. (author). 7 refs, 11 figs

  7. 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)

  8. A Reconsideration of Full-Cost Pricing

    OpenAIRE

    Nubbemeyer, Elmar

    2010-01-01

    The wide use of full-cost pricing techniques remains an explanandum in both economics and management accounting theory. This work surveys and develops possible theoretical explanations of this industrial pricing behaviour and analyses some of its implications. By recognition of the widespread use of imperfect cost-plus pricing heuristics, observable pricing behaviour, as well as empirical market-level phenomena, can be explained. Furthermore, methodological aspects of marginalist price the...

  9. 48 CFR 52.215-20 - Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data.

    Science.gov (United States)

    2010-10-01

    ... Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data. 52.215-20 Section 52.215-20... Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data. As prescribed in 15.408(l), insert the following provision: Requirements for Certified Cost or Pricing Data and Data Other Than...

  10. 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...

  11. Optimal Willingness to Supply Wholesale Electricity Under Asymmetric Linearized Marginal Costs

    Directory of Open Access Journals (Sweden)

    David Hudgins

    2012-01-01

    Full Text Available This analysis derives the profit-maximizing willingness to supply functions for single-plant and multi-plant wholesale electricity suppliers that all incur linear marginal costs. The optimal strategy must result in linear residual demand functions in the absence of capacity constraints. This necessarily leads to a linear pricing rule structure that can be used by firm managers to construct their offer curves and to serve as a benchmark to evaluate firm profit-maximizing behavior. The procedure derives the cost functions and the residual demand curves for merged or multi-plant generators, and uses these to construct the individual generator plant offer curves for a multi-plant firm.

  12. 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)

  13. 48 CFR 215.403-5 - Instructions for submission of cost or pricing data or information other than cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ... submission of cost or pricing data or information other than cost or pricing data. 215.403-5 Section 215.403... DEFENSE CONTRACTING METHODS AND CONTRACT TYPES CONTRACTING BY NEGOTIATION Contract Pricing 215.403-5 Instructions for submission of cost or pricing data or information other than cost or pricing data. When the...

  14. 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...

  15. An Insight Into the Two Costing Technique: Absorption Costing and Marginal Costing

    Directory of Open Access Journals (Sweden)

    Mariam Nawaz

    2013-02-01

    Full Text Available This paper will investigate the controversy that is innate between the two costing techniques; Absorption Costing and Marginal Costing and would throw light on which costing technique better serves its purpose in helping management for decision making process and if Marginal Costing technique is concluded as better technique then why it should not be used for external reporting purpose. This paper will only crystallize and highlight the issues descriptively and will not resolve the issues that are inherent between the two costing techniques. The unique thing about this paper is that it is in favor of treating fixed cost as product cost that is it is supporting the advocates of Absorption Costing Technique but it is against to consider profit as a function of production rather it believes that profit should only be considered as function of sales for stock valuation and to help management in decision making process that is, regarding this point it is supporting advocates of Marginal Costing.

  16. Price-Transparency and Cost Accounting

    Science.gov (United States)

    Eakin, Cynthia; Fischer, Katrina

    2015-01-01

    Health care reform is directed toward improving access and quality while containing costs. An essential part of this is improvement of pricing models to more accurately reflect the costs of providing care. Transparent prices that reflect costs are necessary to signal information to consumers and producers. This information is central in a consumer-driven marketplace. The rapid increase in high deductible insurance and other forms of cost sharing incentivizes the search for price information. The organizational ability to measure costs across a cycle of care is an integral component of creating value, and will play a greater role as reimbursements transition to episode-based care, value-based purchasing, and accountable care organization models. This article discusses use of activity-based costing (ABC) to better measure the cost of health care. It describes examples of ABC in health care organizations and discusses impediments to adoption in the United States including cultural and institutional barriers. PMID:25862425

  17. Price-Transparency and Cost Accounting

    Directory of Open Access Journals (Sweden)

    Peter Hilsenrath PhD

    2015-04-01

    Full Text Available Health care reform is directed toward improving access and quality while containing costs. An essential part of this is improvement of pricing models to more accurately reflect the costs of providing care. Transparent prices that reflect costs are necessary to signal information to consumers and producers. This information is central in a consumer-driven marketplace. The rapid increase in high deductible insurance and other forms of cost sharing incentivizes the search for price information. The organizational ability to measure costs across a cycle of care is an integral component of creating value, and will play a greater role as reimbursements transition to episode-based care, value-based purchasing, and accountable care organization models. This article discusses use of activity-based costing (ABC to better measure the cost of health care. It describes examples of ABC in health care organizations and discusses impediments to adoption in the United States including cultural and institutional barriers.

  18. Decentralized Pricing in Minimum Cost Spanning Trees

    DEFF Research Database (Denmark)

    Hougaard, Jens Leth; Moulin, Hervé; Østerdal, Lars Peter

    In the minimum cost spanning tree model we consider decentralized pricing rules, i.e. rules that cover at least the ecient cost while the price charged to each user only depends upon his own connection costs. We de ne a canonical pricing rule and provide two axiomatic characterizations. First......, the canonical pricing rule is the smallest among those that improve upon the Stand Alone bound, and are either superadditive or piece-wise linear in connection costs. Our second, direct characterization relies on two simple properties highlighting the special role of the source cost....

  19. Marginal abatement cost curves and the optimal timing of mitigation measures

    International Nuclear Information System (INIS)

    Vogt-Schilb, Adrien; Hallegatte, Stéphane

    2014-01-01

    Decision makers facing abatement targets need to decide which abatement measures to implement, and in which order. Measure-explicit marginal abatement cost curves depict the cost and abating potential of available mitigation options. Using a simple intertemporal optimization model, we demonstrate why this information is not sufficient to design emission reduction strategies. Because the measures required to achieve ambitious emission reductions cannot be implemented overnight, the optimal strategy to reach a short-term target depends on longer-term targets. For instance, the best strategy to achieve European's −20% by 2020 target may be to implement some expensive, high-potential, and long-to-implement options required to meet the −75% by 2050 target. Using just the cheapest abatement options to reach the 2020 target can create a carbon-intensive lock-in and make the 2050 target too expensive to reach. Designing mitigation policies requires information on the speed at which various measures to curb greenhouse gas emissions can be implemented, in addition to the information on the costs and potential of such measures provided by marginal abatement cost curves. - Highlights: • Classification of existing Marginal Abatement Cost Curves (MACC). • MACCs do not provide separated data on the speed at which measures can be implemented. • Optimal measures to reach a short-term target depend on longer-term targets. • Unique carbon price or aggregated emission-reduction target may be insufficient. • Room for short-term sectoral policies if agents are myopic or governments cannot commit

  20. An Insight Into the Two Costing Technique: Absorption Costing and Marginal Costing

    OpenAIRE

    Mariam Nawaz

    2013-01-01

    This paper will investigate the controversy that is innate between the two costing techniques; Absorption Costing and Marginal Costing and would throw light on which costing technique better serves its purpose in helping management for decision making process and if Marginal Costing technique is concluded as better technique then why it should not be used for external reporting purpose. This paper will only crystallize and highlight the issues descriptively and will not resolve the issues tha...

  1. Do Canadian electricity prices reflect costs?

    International Nuclear Information System (INIS)

    Jaccard, M.

    1993-01-01

    In an article by Cairns and Heyes (1993), it is argued that electricity pricing in Canada diverges from cost due to inter-class rate design that results in cross-subsidies, subsidized cost of capital, intra-class rate design that lacks time-of-use pricing, and failure to collect differential rent. Some problems with the key components of the initial assumption that prices diverge from cost are examined. The premise that inter-class rate design results in cross-subsidies may be correct, but is difficult to test since unregulated crown utilities are not required to make the necessary information public. Cairns and Heyes are on firmer ground in their assertion that provincial government backing of utility debts leads to lower costs of capital than would otherwise occur. Quebec and British Columbia governments have recently undertaken revenue collection initiatives justified under the rationale of addressing this situation. However, there are problems with the assumption that lack of time-of-use pricing indicates cost/price divergence, since such pricing is especially relevant in capacity-critical systems. Most hydroelectric systems are energy-critical and time-of-use differentials are not appropriate. Finally, recent evidence suggests reassessing the differential rent assumptions of the 1980s. The economic rents estimated in that period may be more accurately described as windfall rents existing in the short term while markets adjust to erratic fuel prices and cost changes in nuclear and hydro energy. There may be good economic efficiency arguments against short-term rent collection strategies involving erratic price adjustments. 1 ref

  2. 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.

  3. 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

  4. 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 ...

  5. The Shuttle Cost and Price model

    Science.gov (United States)

    Leary, Katherine; Stone, Barbara

    1983-01-01

    The Shuttle Cost and Price (SCP) model was developed as a tool to assist in evaluating major aspects of Shuttle operations that have direct and indirect economic consequences. It incorporates the major aspects of NASA Pricing Policy and corresponds to the NASA definition of STS operating costs. An overview of the SCP model is presented and the cost model portion of SCP is described in detail. Selected recent applications of the SCP model to NASA Pricing Policy issues are presented.

  6. 49 CFR 19.45 - Cost and price analysis.

    Science.gov (United States)

    2010-10-01

    ... 49 Transportation 1 2010-10-01 2010-10-01 false Cost and price analysis. 19.45 Section 19.45... Requirements Procurement Standards § 19.45 Cost and price analysis. Some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action. Price...

  7. 24 CFR 84.45 - Cost and price analysis.

    Science.gov (United States)

    2010-04-01

    ... 24 Housing and Urban Development 1 2010-04-01 2010-04-01 false Cost and price analysis. 84.45....45 Cost and price analysis. Some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action. Price analysis may be accomplished in various...

  8. 43 CFR 12.945 - Cost and price analysis.

    Science.gov (United States)

    2010-10-01

    ... 43 Public Lands: Interior 1 2010-10-01 2010-10-01 false Cost and price analysis. 12.945 Section 12... Requirements § 12.945 Cost and price analysis. Some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action. Price analysis may be...

  9. 22 CFR 145.45 - Cost and price analysis.

    Science.gov (United States)

    2010-04-01

    ... 22 Foreign Relations 1 2010-04-01 2010-04-01 false Cost and price analysis. 145.45 Section 145.45....45 Cost and price analysis. Some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action. Price analysis may be accomplished in various...

  10. 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

  11. 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)

  12. 29 CFR 95.45 - Cost and price analysis.

    Science.gov (United States)

    2010-07-01

    ... 29 Labor 1 2010-07-01 2010-07-01 true Cost and price analysis. 95.45 Section 95.45 Labor Office of... Procurement Standards § 95.45 Cost and price analysis. Some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action. Price analysis may be...

  13. 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

  14. 48 CFR 52.215-10 - Price Reduction for Defective Certified Cost or Pricing Data.

    Science.gov (United States)

    2010-10-01

    ... Defective Certified Cost or Pricing Data. 52.215-10 Section 52.215-10 Federal Acquisition Regulations System... Text of Provisions and Clauses 52.215-10 Price Reduction for Defective Certified Cost or Pricing Data... or Pricing Data (OCT 2010) (a) If any price, including profit or fee, negotiated in connection with...

  15. Frequent price changes under menu costs

    DEFF Research Database (Denmark)

    Hansen, Per Svejstrup

    1999-01-01

    , the price may be changed more frequent in the short run, and in the long run it definitely will. Hence, observing frequent price changes is not necessarily inconsistent with a firm operating under menu costs. This paper relies on an article by Dixit (1991), (Review of Economic studies, 58, 141......This paper investigates the effect of uncertainty on a single firm's pricing behaviour in a dynamic menu cost model that results in (S,s)-rules where the price is fixed inside a band. It will be demonstrated that even though the band of inaction widens in response to increased uncertainty...

  16. Short-term marginal costs in French agriculture

    OpenAIRE

    Latruffe, Laure; LETORT, Elodie

    2011-01-01

    The paper investigates short-term marginal costs in French agriculture for field cropping, beef cattle, and dairy farms during the period 1995-2006. The multi-input multi-output Symmetric Generalised MacFadden cost function is used, with three variable inputs (crop-specific, animal-specific, energy costs), four outputs and three quasi-fixed inputs. Results indicate that marginal costs are on average lower for crop farms than for livestock samples. However, for crop farms, Common Agricultural ...

  17. 7 CFR 550.47 - Cost and price analysis.

    Science.gov (United States)

    2010-01-01

    ... 7 Agriculture 6 2010-01-01 2010-01-01 false Cost and price analysis. 550.47 Section 550.47... OF AGRICULTURE GENERAL ADMINISTRATIVE POLICY FOR NON-ASSISTANCE COOPERATIVE AGREEMENTS Management of Agreements Procurement Standards § 550.47 Cost and price analysis. Some form of cost or price analysis shall...

  18. 40 CFR 35.6585 - Cost and price analysis.

    Science.gov (United States)

    2010-07-01

    ... 40 Protection of Environment 1 2010-07-01 2010-07-01 false Cost and price analysis. 35.6585... Response Actions Procurement Requirements Under A Cooperative Agreement § 35.6585 Cost and price analysis. (a) General. The recipient must conduct and document a cost or price analysis in connection with...

  19. 14 CFR 1274.506 - Cost and price analysis.

    Science.gov (United States)

    2010-01-01

    ... 14 Aeronautics and Space 5 2010-01-01 2010-01-01 false Cost and price analysis. 1274.506 Section... WITH COMMERCIAL FIRMS Procurement Standards § 1274.506 Cost and price analysis. Some form of cost or price analysis shall be made and documented in the procurement files in connection with every...

  20. 15 CFR 14.45 - Cost and price analysis.

    Science.gov (United States)

    2010-01-01

    ... 15 Commerce and Foreign Trade 1 2010-01-01 2010-01-01 false Cost and price analysis. 14.45 Section... COMMERCIAL ORGANIZATIONS Post-Award Requirements Procurement Standards § 14.45 Cost and price analysis. Some form of cost or price analysis shall be made and documented in the procurement files in connection with...

  1. 45 CFR 74.45 - Cost and price analysis.

    Science.gov (United States)

    2010-10-01

    ... 45 Public Welfare 1 2010-10-01 2010-10-01 false Cost and price analysis. 74.45 Section 74.45... ORGANIZATIONS, AND COMMERCIAL ORGANIZATIONS Post-Award Requirements Procurement Standards § 74.45 Cost and price analysis. Some form of cost or price analysis shall be made and documented in the procurement files in...

  2. 45 CFR 2543.45 - Cost and price analysis.

    Science.gov (United States)

    2010-10-01

    ... 45 Public Welfare 4 2010-10-01 2010-10-01 false Cost and price analysis. 2543.45 Section 2543.45... ORGANIZATIONS Post-Award Requirements Property Standards § 2543.45 Cost and price analysis. Some form of cost or price analysis shall be made and documented in the procurement files in connection with every...

  3. 28 CFR 70.45 - Cost and price analysis.

    Science.gov (United States)

    2010-07-01

    ... 28 Judicial Administration 2 2010-07-01 2010-07-01 false Cost and price analysis. 70.45 Section 70... NON-PROFIT ORGANIZATIONS Post-Award Requirements Procurement Standards § 70.45 Cost and price analysis. Some form of cost or price analysis must be made and documented in the procurement files in connection...

  4. 40 CFR 30.45 - Cost and price analysis.

    Science.gov (United States)

    2010-07-01

    ... 40 Protection of Environment 1 2010-07-01 2010-07-01 false Cost and price analysis. 30.45 Section... price analysis. Some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action. Price analysis may be accomplished in various ways...

  5. 38 CFR 49.45 - Cost and price analysis.

    Science.gov (United States)

    2010-07-01

    ... 38 Pensions, Bonuses, and Veterans' Relief 2 2010-07-01 2010-07-01 false Cost and price analysis... price analysis. Some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action. Price analysis may be accomplished in various ways...

  6. 14 CFR 1260.145 - Cost and price analysis.

    Science.gov (United States)

    2010-01-01

    ... 14 Aeronautics and Space 5 2010-01-01 2010-01-01 false Cost and price analysis. 1260.145 Section... price analysis. Some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action. Price analysis may be accomplished in various ways...

  7. 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...

  8. 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...

  9. 32 CFR 32.45 - Cost and price analysis.

    Science.gov (United States)

    2010-07-01

    ... 32 National Defense 1 2010-07-01 2010-07-01 false Cost and price analysis. 32.45 Section 32.45... price analysis. Some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action. Price analysis may be accomplished in various ways...

  10. 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

  11. Peak load pricing lowers generation costs

    International Nuclear Information System (INIS)

    Lande, R.H.

    1980-01-01

    Before a utility implements peak load pricing for different classes of consumers, the costs and the benefits should be compared. The methodology described enables a utility to determine whether peak load pricing should be introduced for specific users. Cost-benefit analyses for domestic consumers and commercial/industrial consumers, showing break-even points are presented. (author)

  12. Applying Activity Based Costing (ABC) Method to Calculate Cost Price in Hospital and Remedy Services.

    Science.gov (United States)

    Rajabi, A; Dabiri, A

    2012-01-01

    Activity Based Costing (ABC) is one of the new methods began appearing as a costing methodology in the 1990's. It calculates cost price by determining the usage of resources. In this study, ABC method was used for calculating cost price of remedial services in hospitals. To apply ABC method, Shahid Faghihi Hospital was selected. First, hospital units were divided into three main departments: administrative, diagnostic, and hospitalized. Second, activity centers were defined by the activity analysis method. Third, costs of administrative activity centers were allocated into diagnostic and operational departments based on the cost driver. Finally, with regard to the usage of cost objectives from services of activity centers, the cost price of medical services was calculated. The cost price from ABC method significantly differs from tariff method. In addition, high amount of indirect costs in the hospital indicates that capacities of resources are not used properly. Cost price of remedial services with tariff method is not properly calculated when compared with ABC method. ABC calculates cost price by applying suitable mechanisms but tariff method is based on the fixed price. In addition, ABC represents useful information about the amount and combination of cost price services.

  13. 48 CFR 1602.170-5 - Cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ... 48 Federal Acquisition Regulations System 6 2010-10-01 2010-10-01 true Cost or pricing data. 1602... Terms 1602.170-5 Cost or pricing data. (a) Experience-rated carriers. Cost or pricing data for... pricing data for community rated carriers is the specialized rating data used by carriers in computing a...

  14. 41 CFR 105-72.505 - Cost and price analysis.

    Science.gov (United States)

    2010-07-01

    ... 41 Public Contracts and Property Management 3 2010-07-01 2010-07-01 false Cost and price analysis... § 105-72.505 Cost and price analysis. Some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action. Price analysis may be...

  15. 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

  16. 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

  17. Minimum-Cost Reachability for Priced Timed Automata

    DEFF Research Database (Denmark)

    Behrmann, Gerd; Fehnker, Ansgar; Hune, Thomas Seidelin

    2001-01-01

    This paper introduces the model of linearly priced timed automata as an extension of timed automata, with prices on both transitions and locations. For this model we consider the minimum-cost reachability problem: i.e. given a linearly priced timed automaton and a target state, determine...... the minimum cost of executions from the initial state to the target state. This problem generalizes the minimum-time reachability problem for ordinary timed automata. We prove decidability of this problem by offering an algorithmic solution, which is based on a combination of branch-and-bound techniques...... and a new notion of priced regions. The latter allows symbolic representation and manipulation of reachable states together with the cost of reaching them....

  18. Cost-effectiveness and pricing of antibacterial drugs.

    Science.gov (United States)

    Verhoef, Talitha I; Morris, Stephen

    2015-01-01

    Growing resistance to antibacterial agents has increased the need for the development of new drugs to treat bacterial infections. Given increasing pressure on limited health budgets, it is important to study the cost-effectiveness of these drugs, as well as their safety and efficacy, to find out whether or not they provide value for money and should be reimbursed. In this article, we systematically reviewed 38 cost-effectiveness analyses of new antibacterial agents. Most studies showed the new antibacterial drugs were cost-effective compared to older generation drugs. Drug pricing is a complicated process, involving different stakeholders, and has a large influence on cost-effectiveness. Value-based pricing is a method to determine the price of a drug at which it can be cost-effective. It is currently unclear what the influence of value-based pricing will be on the prices of new antibacterial agents, but an important factor will be the definition of 'value', which as well as the impact of the drug on patient health might also include other factors such as wider social impact and the health impact of disease. © 2015 The Authors. Chemical Biology & Drug Design Published by John Wiley & Sons Ltd.

  19. Phosphate rock costs, prices and resources interaction.

    Science.gov (United States)

    Mew, M C

    2016-01-15

    This article gives the author's views and opinions as someone who has spent his working life analyzing the international phosphate sector as an independent consultant. His career spanned two price hike events in the mid-1970's and in 2008, both of which sparked considerable popular and academic interest concerning adequacy of phosphate rock resources, the impact of rising mining costs and the ability of mankind to feed future populations. An analysis of phosphate rock production costs derived from two major industry studies performed in 1983 and 2013 shows that in nominal terms, global average cash production costs increased by 27% to $38 per tonne fob mine in the 30 year period. In real terms, the global average cost of production has fallen. Despite the lack of upward pressure from increasing costs, phosphate rock market prices have shown two major spikes in the 30 years to 2013, with periods of less volatility in between. These price spike events can be seen to be related to the escalating investment cost required by new mine capacity, and as such can be expected to be repeated in future. As such, phosphate rock price volatility is likely to have more impact on food prices than rising phosphate rock production costs. However, as mining costs rise, recycling of P will also become increasingly driven by economics rather than legislation. Copyright © 2015 Elsevier B.V. All rights reserved.

  20. 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)

  1. Cost-reflective electricity pricing: Consumer preferences and perceptions

    International Nuclear Information System (INIS)

    Hall, Nina L.; Jeanneret, Talia D.; Rai, Alan

    2016-01-01

    In Australia, residential electricity peak demand has risen steeply in recent decades, leading to higher prices as new infrastructure was needed to satisfy demand. One way of limiting further infrastructure-induced retail price rises is via ‘cost-reflective’ electricity network pricing that incentivises users to shift their demand to non-peak periods. Empowering consumers with knowledge of their energy usage is critical to maximise the potential benefits of cost-reflective pricing. This research consulted residential electricity consumers in three Australian states on their perceptions and acceptance of two cost-reflective pricing scenarios (Time-of-Use and Peak Capacity pricing) and associated technologies to support such pricing (smart meters, in-home displays and direct load control devices). An energy economist presented information to focus groups on the merits and limitations of each scenario, and participants’ views were captured. Almost half of the 53 participants were agreeable to Time-of-Use pricing, but did not have a clear preference for Peak Capacity pricing, where the price was based on the daily maximum demand. Participants recommended further information to both understand and justify the potential benefits, and for technologies to be introduced to enhance the pricing options. The results have implications for utilities and providers who seek to reduce peak demand. - Highlights: •Electricity price rises can be limited by ‘cost-reflective’ pricing. •We consulted residential electricity consumers on Time-of-Use and Peak Capacity pricing. •Understanding of peak electricity demand must increase to enable demand shift. •Interactive website could enable consumers to evaluate pricing options. •Smart meter adoption may increase if voluntary and includes an in-home display.

  2. Decommissioning Cost Estimating -The ''Price'' Approach

    International Nuclear Information System (INIS)

    Manning, R.; Gilmour, J.

    2002-01-01

    Over the past 9 years UKAEA has developed a formalized approach to decommissioning cost estimating. The estimating methodology and computer-based application are known collectively as the PRICE system. At the heart of the system is a database (the knowledge base) which holds resource demand data on a comprehensive range of decommissioning activities. This data is used in conjunction with project specific information (the quantities of specific components) to produce decommissioning cost estimates. PRICE is a dynamic cost-estimating tool, which can satisfy both strategic planning and project management needs. With a relatively limited analysis a basic PRICE estimate can be produced and used for the purposes of strategic planning. This same estimate can be enhanced and improved, primarily by the improvement of detail, to support sanction expenditure proposals, and also as a tender assessment and project management tool. The paper will: describe the principles of the PRICE estimating system; report on the experiences of applying the system to a wide range of projects from contaminated car parks to nuclear reactors; provide information on the performance of the system in relation to historic estimates, tender bids, and outturn costs

  3. 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)

  4. Smart Environmental Policy with Full-Cost Pricing

    Directory of Open Access Journals (Sweden)

    Nancy Olewiler

    2012-03-01

    Full Text Available Canada’s natural capital — its resources, ecosystems and wildlife — are indispensable to the productivity of industry. Despite this, both the public and private sectors have failed to adequately factor in the consequences of production and consumption on the natural environment. There is a growing need for full-cost pricing, a system that adjusts market prices to reflect not only the direct costs of good and services, but also their impact on this country’s natural capital. As this paper argues, the onus is on the federal government to create the conditions for full-cost pricing to succeed. Ottawa needs to eliminate energy subsidies (to producers and consumers, implement full-cost pricing on air contaminants and greenhouse gases and encourage projects at the provincial and municipal levels that adopt that methodology. The benefits include productivity gains; potentially billions in savings for consumers, businesses and governments; a strong environment supporting sustainable industries; and simplified tax systems. In surveying past and existing federal initiatives and missed opportunities in previous budgets, this paper assesses costs and consequences, arguing that a healthy environment is synonymous with a healthy economy, and providing hard data to back up that conviction. With Budget 2012 just around the corner, the time is ripe for the Harper government to introduce full-cost pricing, and guarantee Canada a brighter future.

  5. [International reference prices and cost minimization analysis for the regulation of medicine prices in Colombia].

    Science.gov (United States)

    Vacca, Caludia; Acosta, Angela; Rodriguez, Ivan

    2011-01-01

    To suggest a scheme of decision making on pricing for medicines that are part of Free Regulated Regime, a regulation way of the pharmaceutical pricing policy in Colombia. It includes two regulation tools: international reference prices and a cost minimization analysis methodology. Following the current pricing policy, international reference prices were built with data from five countries for selected medicines, which are under Free Regulated Regime. The cost minimization analysis methodology includes selection of those medicines under Free Regulated Regime with possible comparable medicines, selection of comparable medicines, and treatment costs evaluation. As a result of the estimate of International Reference Prices, four medicines showed in the domestic pharmaceutical market a bigger price than the Reference Price. A scheme of decision-making was design containing two possible regulation tools for medicines that are part of Free Regulated Regime: estimate of international reference prices and cost minimization analysis methodology. This diagram would be useful to assist the pricing regulation of Free Regulated Regime in Colombia. As present results shows, international reference prices make clear when domestic prices are higher than those of reference countries. In the current regulation of pharmaceutical prices in Colombia, the international reference price has been applied for four medicines. Would be suitable to extend this methodology to other medicines of high impact on the pharmaceutical expenditure, in particular those covered by public funding. The availability of primary sources about treatment costs in Colombia needs to be improved as a requirement to develop pharmaco-economic evidence. SISMED is an official database that represents an important primary source of medicines prices in Colombia. Nevertheless, having into account that SISMED represents an important advantage of transparency in medicines prices, it needs to be improved in quality and data

  6. 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...

  7. 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.

  8. 48 CFR 1615.407-1 - Rate reduction for defective pricing or defective cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ... defective pricing or defective cost or pricing data. 1615.407-1 Section 1615.407-1 Federal Acquisition... CONTRACTING METHODS AND CONTRACT TYPES CONTRACTING BY NEGOTIATION Contract Pricing 1615.407-1 Rate reduction for defective pricing or defective cost or pricing data. The clause set forth in section 1652.215-70...

  9. 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 ...

  10. 48 CFR 15.407 - Special cost or pricing areas.

    Science.gov (United States)

    2010-10-01

    ... 48 Federal Acquisition Regulations System 1 2010-10-01 2010-10-01 false Special cost or pricing... CONTRACTING METHODS AND CONTRACT TYPES CONTRACTING BY NEGOTIATION Contract Pricing 15.407 Special cost or pricing areas. ...

  11. 48 CFR 1315.407 - Special cost or pricing areas.

    Science.gov (United States)

    2010-10-01

    ... 48 Federal Acquisition Regulations System 5 2010-10-01 2010-10-01 false Special cost or pricing... CONTRACTING METHODS AND CONTRACT TYPES CONTRACTING BY NEGOTIATION Contract Pricing 1315.407 Special cost or pricing areas. ...

  12. 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.

  13. 48 CFR 1815.407 - Special cost or pricing areas.

    Science.gov (United States)

    2010-10-01

    ... 48 Federal Acquisition Regulations System 6 2010-10-01 2010-10-01 true Special cost or pricing... ADMINISTRATION CONTRACTING METHODS AND CONTRACT TYPES CONTRACTING BY NEGOTIATION Contract Pricing 1815.407 Special cost or pricing areas. ...

  14. 48 CFR 1815.403 - Obtaining cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ... 48 Federal Acquisition Regulations System 6 2010-10-01 2010-10-01 true Obtaining cost or pricing... ADMINISTRATION CONTRACTING METHODS AND CONTRACT TYPES CONTRACTING BY NEGOTIATION Contract Pricing 1815.403 Obtaining cost or pricing data. ...

  15. 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.

  16. A model for energy pricing with stochastic emission costs

    International Nuclear Information System (INIS)

    Elliott, Robert J.; Lyle, Matthew R.; Miao, Hong

    2010-01-01

    We use a supply-demand approach to value energy products exposed to emission cost uncertainty. We find closed form solutions for a number of popularly traded energy derivatives such as: forwards, European call options written on spot prices and European Call options written on forward contracts. Our modeling approach is to first construct noisy supply and demand processes and then equate them to find an equilibrium price. This approach is very general while still allowing for sensitivity analysis within a valuation setting. Our assumption is that, in the presence of emission costs, traditional supply growth will slow down causing output prices of energy products to become more costly over time. However, emission costs do not immediately cause output price appreciation, but instead expose individual projects, particularly those with high emission outputs, to much more extreme risks through the cost side of their profit stream. Our results have implications for hedging and pricing for producers operating in areas facing a stochastic emission cost environment. (author)

  17. Innovation in technology for the least product price and cost - a new minimum cost relation for reductions during technological learning

    International Nuclear Information System (INIS)

    Duffey, R.B.

    2004-01-01

    By analogy with the concepts of human learning, we show and introduce a new method to obtain least product cost and price that includes the effect of innovation and technological learning in manufacturing and production. This key result is a new paradigm instead of the usual economic 'power law' formulation. The new analysis is based on extensive analysis of many technological systems, and is directly related to the presence of learning as experience is accumulated. The results agree with the observed data. By using a consistent basis, the method replaces previous empirical 'power law' descriptions of the technological learning curve with a new 'marginal minimum cost equation' (MCE). (author)

  18. 48 CFR 1652.215-70 - Rate Reduction for Defective Pricing or Defective Cost or Pricing Data.

    Science.gov (United States)

    2010-10-01

    ... Defective Pricing or Defective Cost or Pricing Data. 1652.215-70 Section 1652.215-70 Federal Acquisition... CLAUSES AND FORMS CONTRACT CLAUSES Texts of FEHBP Clauses 1652.215-70 Rate Reduction for Defective Pricing or Defective Cost or Pricing Data. As prescribed in 1615.407-1, the following clause shall be...

  19. Book Discounts and Cost-Plus Pricing

    Science.gov (United States)

    Andresen, David C.

    1974-01-01

    The adoption of cost-plus pricing by a major book jobber may have profound effects on the discounts that libraries receive. The article explains the pricing system and presents a set of graphs for libraries to use to determine its effects. (Author)

  20. Minimum-Cost Reachability for Priced Timed Automata

    DEFF Research Database (Denmark)

    Behrmann, Gerd; Fehnker, Ansgar; Hune, Thomas Seidelin

    2001-01-01

    This paper introduces the model of linearly priced timed automata as an extension of timed automata, with prices on both transitions and locations. For this model we consider the minimum-cost reachability problem: i.e. given a linearly priced timed automaton and a target state, determine...... the minimum cost of executions from the initial state to the target state. This problem generalizes the minimum-time reachability problem for ordinary timed automata. We prove decidability of this problem by offering an algorithmic solution, which is based on a combination of branch-and-bound techniques...

  1. Truly costly sequential search and oligopolistic pricing

    NARCIS (Netherlands)

    Janssen, Maarten C W; Moraga-González, José Luis; Wildenbeest, Matthijs R.

    We modify the paper of Stahl (1989) [Stahl, D.O., 1989. Oligopolistic pricing with sequential consumer search. American Economic Review 79, 700-12] by relaxing the assumption that consumers obtain the first price quotation for free. When all price quotations are costly to obtain, the unique

  2. 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.)

  3. The marginal social cost of headway for a scheduled service

    DEFF Research Database (Denmark)

    Fosgerau, Mogens

    2009-01-01

    waiting time costs as well as schedule delay costs measured relative to their desired time of arrival at the destination. They may either arrive at the station to choose just the next departure or they may plan for a specific departure in which case they incur also a planning cost. Then planning......This brief paper derives the marginal social cost of headway for a scheduled service, i.e. the cost for users of marginal increases to the time interval between departures. In brief we may call it the value of headway in analogy with the value of travel time and the value of reliability. Users have...... for a specific departure is costly but becomes more attractive at longer headways. Simple expressions for the user cost result. In particular, the marginal cost of headway is large at short headways and smaller at long headways. The difference in marginal costs is the value of time multiplied by half the headway....

  4. Operational strategy and marginal costs in simple trigeneration systems

    International Nuclear Information System (INIS)

    Lozano, M.A.; Carvalho, M.; Serra, L.M.

    2009-01-01

    As a direct result of economic pressures to cut expenses, as well as the legal obligation to reduce emissions, companies and businesses are seeking ways to use energy more efficiently. Trigeneration systems (CHCP: Combined Heating, Cooling and Power generation) allow greater operational flexibility at sites with a variable demand for energy in the form of heating and cooling. This is particularly relevant in buildings where the need for heating is restricted to a few winter months. In summer, the absorption chillers make use of the cogenerated heat to produce chilled water, avoiding waste heat discharge. The operation of a simple trigeneration system is analyzed in this paper. The system is interconnected to the electric utility grid, both to receive electricity and to deliver surplus electricity. For any given demand required by the users, a great number of operating conditions are possible. A linear programming model provides the operational mode with the lowest variable cost. A thermoeconomic analysis, based on marginal production costs, is used to obtain unit costs for internal energy flows and final products as well as to explain the best operational strategy as a function of the demand for energy services and the prices of the resources consumed. (author)

  5. 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.

  6. Timber harvesting with variable prices, costs and interest rates

    International Nuclear Information System (INIS)

    Penttinen, M.

    2000-01-01

    This papers solves the optimal harvesting time problem of a non- industrial private forest (NIPF) owner who typically has a forest management plan and merchantable forest stands. The optimal harvesting time is defined in a volatile market situation. The infinite period problem is also formulated to allow for variable stumpage prices and reforestation costs in a two-period framework, the first of which covers the near future with dynamic price and cost functions and the second the rest of the infinite future with trend price and cost functions. The existence and uniqueness of an optimal policy is demonstrated on the basis of the explicit quasi- concavity of the objective functions. First, the solutions are constructed with prices and costs dependent on stand age only. Both cases in which the same prices and costs hold for all periods and cases in which there are dynamic prices and costs in the first period and trend ones in subsequent periods are considered. Second, the age-dependent functions are multiplied separately by the calendar time dependent exponential terms. Solutions are provided both in the case with the same age-dependent functions and the case with dynamic functions for the first period and trend functions for the subsequent periods. The sensitivity and comparative static analyses are studied with respect to the interest rate, price and cost changes, both analytically and numerically. Optimal rotation solutions are presented with alternative competing volume growth functions. Final results are provided by a gross income growth function. Competing optimisation models are discussed, and alternative volume growth models and a value growth model are compared. The key notion of the research is the sensitivity and comparative static analysis of the optimal rotation solutions with respect to roundwood prices, reforestation costs and interest rates. Different local market parameter and alternative growth data estimates are applied in testing the impact of

  7. 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

  8. The Value of Negotiating Cost-Based Transfer Prices

    Directory of Open Access Journals (Sweden)

    Anne Chwolka

    2010-10-01

    Full Text Available This paper analyzes the potential of one-step transfer prices based on either variable or full costs for coordinating decentralized production and quality-improving investment decisions. Transfer prices based on variable costs fail to induce investments on the upstream stage. In contrast, transfer prices based on full costs provide strong investment incentives for the upstream divisions. However, they fail to coordinate the investment decisions. We show that negotiations prevent such coordination failure. In particular, we find that the firm benefits from a higher degree of decentralization so that total profit increases in the number of parameters being subject to negotiations.

  9. 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

  10. Road pricing, air pollution and external costs; Road pricing, luftforurening og eksternalitetsomkostninger

    Energy Technology Data Exchange (ETDEWEB)

    Solvang Jensen, S.; Ketzel, M. (Aarhus Univ., Danmarks Miljoeundersoegelser, Afd. for Atmosfaerisk Miljoe, Roskilde (Denmark)); Skou Andersen, M. (Aarhus Univ., Danmarks Miljoeundersoegelser, Afd. for Systemanalyse, Roskilde (Denmark))

    2010-06-15

    The objective of this assessment is to improve the foundation for decision-making about introduction of a road pricing system that aims to reduce the health impacts and social costs of traffic-related air pollution. The analysis focuses on how road emissions, air quality, population exposure, and social costs of air pollution depend on geography (different city sizes and rural areas) and time of the day (rush hours versus non-rush hours). A review of Danish studies related to road pricing has also been carried out to assess the expected effect of road pricing on traffic performance (km travelled), vehicle composition and speed that are factors affecting air pollution. (LN)

  11. Cost-Sharing and Drug Pricing Strategies : Introducing Tiered Co-Payments in Reference Price Markets

    NARCIS (Netherlands)

    Suppliet, Moritz; Herr, Annika

    2016-01-01

    Health insurances curb price insensitive behavior and moral hazard of insureds through different types of cost-sharing, such as tiered co-payments or reference pricing. This paper evaluates the effect of newly introduced price limits below which drugs are exempt from co-payments on the pricing

  12. Local Telephone Costs and the Design of Rate Structures,

    Science.gov (United States)

    1981-05-01

    basic principles developed from this theory. These principles call for provisionally pricing each of the firm’s outputs at its marginal cost, testing...rule--prices are increased above marginal costs in inverse proportion to the individual price elasticities of demand. This paper applies ratemaking ...The fol- lowing sections develop a series of simple models that successively incorporate these basic elements. Throughout the paper I make several

  13. 48 CFR 1352.215-76 - Cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ... 48 Federal Acquisition Regulations System 5 2010-10-01 2010-10-01 false Cost or pricing data. 1352.215-76 Section 1352.215-76 Federal Acquisition Regulations System DEPARTMENT OF COMMERCE CLAUSES AND... pricing data. As prescribed in 48 CFR 1315.204-570(b)(4), insert the following provision: Cost or Pricing...

  14. 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...

  15. 48 CFR 970.1504-3-1 - Cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ... 48 Federal Acquisition Regulations System 5 2010-10-01 2010-10-01 false Cost or pricing data. 970... pricing data. (a) The certification requirements of 48 CFR 15.406-2 are not applied to DOE cost... operating contractors and their subcontractors obtain cost or pricing data prior to the award of a...

  16. 22 CFR 226.45 - Cost and price analysis.

    Science.gov (United States)

    2010-04-01

    ... 22 Foreign Relations 1 2010-04-01 2010-04-01 false Cost and price analysis. 226.45 Section 226.45 Foreign Relations AGENCY FOR INTERNATIONAL DEVELOPMENT ADMINISTRATION OF ASSISTANCE AWARDS TO U.S. NON-GOVERNMENTAL ORGANIZATIONS Post-award Requirements Procurement Standards § 226.45 Cost and price analysis. Some...

  17. 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

  18. 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

  19. 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

  20. 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.

  1. Price setting under cost uncertainty and menu costs - the case of the Danish petrol market

    International Nuclear Information System (INIS)

    Stampe Christensen, M.

    1994-01-01

    This paper derives the optimal pricing policy for a firm facing menu costs and stochastic production cost. The pricing policy is a boundary pricing policy and numerical comparative static analysis shows how exogenous parameters - the drift and variance of the production cost, the discount factor and the menu costs - affect the boundaries. Analyzing daily data for the Danish petrol price illustrates that a boundary pricing policy indeed has been followed for the period 1988-1992, with occasional shifts in both the desired mark-up and more importantly in the width of the bounds. While the theoretical model can say nothing of the shifts in desired mark-up, changes in the width of the bounds are found to be consistent with the implications of the model. (au)

  2. 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.

  3. 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.

  4. 75 FR 53135 - Federal Acquisition Regulation; Definition of Cost or Pricing Data

    Science.gov (United States)

    2010-08-30

    ...; Definition of Cost or Pricing Data AGENCIES: Department of Defense (DoD), General Services Administration... ``certified cost or pricing data'' and ``data other than certified cost or pricing data'', and to clarify requirements for submission of cost or pricing data. DATES: Effective Date: October 1, 2010. FOR FURTHER...

  5. Toward marginal cost pricing of accident risk: the energy, travel, and welfare impacts of pay-at-the-pump auto insurance

    International Nuclear Information System (INIS)

    Kavalec, C.; Woods, J.

    1999-01-01

    This paper examines, theoretically and through a series of simulations, the effect of a pay-at-the-pump auto insurance system where the minimum amount of insurance required by California law is paid through a fuel surcharge. Vehicle fixed costs are reduced while variable costs increase. The results show that gasoline demand would be reduced by roughly two to five percent in 1998 (with greater percentage drops in later years), while VMT would drop by slightly less as the incentive to drive more fuel efficient vehicles reduces exposure to the tax. At the same time, pay-at-the-pump is shown to improve the welfare of the average California driver as insurance is priced more efficiently. In other words, unlike other transportation pricing measures that have been proposed in the recent past (VMT and fuel taxes, pollution fees, etc.), PATP may offer a means of reducing the external costs of transportation (global warming, congestion, etc.) without raising private costs for the average motorist. Another appealing aspect of PATP may be its apparently progressive nature - the lowest income households may see the highest gains in welfare. (author)

  6. 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.

  7. 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...

  8. 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

  9. 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

  10. 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

  11. Some fundamental technical concepts about cost based transmission pricing

    International Nuclear Information System (INIS)

    Shirmohammadi, D.; Filho, X.V.; Gorenstin, B.; Pereira, M.V.P.

    1996-01-01

    In this paper the authors describe the basic technical concepts involved in developing cost based transmission prices. They introduce the concepts of transmission pricing paradigms and methodologies to better illustrate how transmission costs are transformed into transmission prices. The authors also briefly discuss the role of these paradigms and methodologies in promoting ''economic efficiency'' which is narrowly defined in this paper. They conclude the paper with an example of the application of some of these paradigms and methodologies for pricing transmission services in Brazil

  12. 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)

  13. 36 CFR 1210.45 - Cost and price analysis.

    Science.gov (United States)

    2010-07-01

    ... 36 Parks, Forests, and Public Property 3 2010-07-01 2010-07-01 false Cost and price analysis. 1210.45 Section 1210.45 Parks, Forests, and Public Property NATIONAL ARCHIVES AND RECORDS ADMINISTRATION... in various ways, including the comparison of price quotations submitted, market prices and similar...

  14. Estimating Drug Costs: How do Manufacturer Net Prices Compare with Other Common US Price References?

    Science.gov (United States)

    Mattingly, T Joseph; Levy, Joseph F; Slejko, Julia F; Onwudiwe, Nneka C; Perfetto, Eleanor M

    2018-05-12

    Drug costs are frequently estimated in economic analyses using wholesale acquisition cost (WAC), but what is the best approach to develop these estimates? Pharmaceutical manufacturers recently released transparency reports disclosing net price increases after accounting for rebates and other discounts. Our objective was to determine whether manufacturer net prices (MNPs) could approximate the discounted prices observed by the U.S. Department of Veterans Affairs (VA). We compared the annual, average price discounts voluntarily reported by three pharmaceutical manufacturers with the VA price for specific products from each company. The top 10 drugs by total sales reported from company tax filings for 2016 were included. The discount observed by the VA was determined from each drug's list price, reported as WAC, in 2016. Descriptive statistics were calculated for the VA discount observed and a weighted price index was calculated using the lowest price to the VA (Weighted VA Index), which was compared with the manufacturer index. The discounted price as a percentage of the WAC ranged from 9 to 74%. All three indexes estimated by the average discount to the VA were at or below the manufacturer indexes (42 vs. 50% for Eli Lilly, 56 vs. 65% for Johnson & Johnson, and 59 vs. 59% for Merck). Manufacturer-reported average net prices may provide a close approximation of the average discounted price granted to the VA, suggesting they may be a useful proxy for the true pharmacy benefits manager (PBM) or payer cost. However, individual discounts for products have wide variation, making a standard discount adjustment across multiple products less acceptable.

  15. 48 CFR 15.406-2 - Certificate of current cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ... cost or pricing data. 15.406-2 Section 15.406-2 Federal Acquisition Regulations System FEDERAL ACQUISITION REGULATION CONTRACTING METHODS AND CONTRACT TYPES CONTRACTING BY NEGOTIATION Contract Pricing 15.406-2 Certificate of current cost or pricing data. (a) When certified cost or pricing data are...

  16. 48 CFR 52.215-12 - Subcontractor Certified Cost or Pricing Data.

    Science.gov (United States)

    2010-10-01

    ... Cost or Pricing Data. 52.215-12 Section 52.215-12 Federal Acquisition Regulations System FEDERAL... Provisions and Clauses 52.215-12 Subcontractor Certified Cost or Pricing Data. As prescribed in 15.408(d), insert the following clause: Subcontractor Certified Cost or Pricing Data (OCT 2010) (a) Before awarding...

  17. European Option Pricing with Transaction Costs in Lévy Jump Environment

    Directory of Open Access Journals (Sweden)

    Jiayin Li

    2014-01-01

    Full Text Available The European option pricing problem with transaction costs is investigated for a risky asset price model with Lévy jump. By the aid of arbitrage pricing theory and the generalized Itô formula (which includes Poisson jump, the explicit solution to the risk asset price model is given. According to arbitrage-free principle, we first discretize the continuous-time model. Then, in each small time interval, the transaction costs are introduced. By using the Δ-hedging strategy, the explicit solutions of the European options pricing formula with transaction costs are given for the risky asset price model with Lévy jump.

  18. The effect of location and facility demand on the marginal cost of delivered wood chips from energy crops: A case study of the state of Tennessee

    International Nuclear Information System (INIS)

    Graham, R.L.; Liu, W.; Downing, M.; Noon, C.; Daly, M.; Moore, A.

    1995-01-01

    Cost-supply curves for delivered wood chips from short rotation woody crops were calculated for 21 regularly-spaced locations spanning the state of Tennessee. These curves were used to systematically evaluate the combined effects of location and facility demand on wood chip feedstock costs in Tennessee. The cost-supply curves were developed using BRAVO, a GIS-based decision support system which calculates marginal cost of delivering wood chips to a specific location given road network maps and maps of farmgate prices and supplies of woody chips from short rotation energy crops. Marginal costs of delivered chips varied by both facility location in the state and facility demand. Marginal costs were lowest in central Tennessee unless the facility demand was greater than 2.7 million dry Mg per year (3 million dry tons per year) in which case west Tennessee was the lowest cost region. Marginal costs rose rapidly with increasing facility demand in the mountainous eastern portion of the state. Transportation costs accounted for 18 to 29% of the delivered cost and ranged between $8 and $18/dry Mg ($7 and $16/dry ton). Reducing the expected farmer participation rate from 100% to 50% or 25% dramatically raised the marginal costs of feedstock supply in the east and central regions of the state. The analysis demonstrates the need to use geographically-specific information when projecting the potential costs and supplies of biomass feedstock

  19. Estimation of marginal costs at existing waste treatment facilities

    DEFF Research Database (Denmark)

    Martinez Sanchez, Veronica; Hulgaard, Tore; Hindsgaul, Claus

    2016-01-01

    , marginal costs were not (provided a response was initiated at the WtE to keep constant the utilized thermal capacity). Failing to systematically address and include costs in existing waste facilities in decision-making may unintendedly lead to higher overall costs at societal level. To avoid misleading...... a constant thermal load, (ii) Refused-Derived-Fuel (RDF) was included to maintain a constant thermal load, or (iii) no reaction occurred resulting in a reduced waste throughput without full utilization of the facility capacity. Results demonstrated that marginal costs of diversion from WtE were up to eleven...

  20. Influence of generic reference pricing on medicine cost in Slovenia: a retrospective study

    Science.gov (United States)

    Marđetko, Nika; Kos, Mitja

    2018-01-01

    Aim To assess the impact of the generic reference pricing (GRP) system on the prices and cost of medicines in Slovenia approximately 8 years after its introduction in 2003 and before the implementation of the therapeutic reference pricing system. Methods A retrospective study of all medicines (N = 789) included in the GRP system on January 31, 2012 was performed. Medicine prices and cost were analyzed between January 31, 2012 and December 31, 2013 after every update (N = 11) of the maximum reimbursable price (MRP) and were compared to the price and cost on January 31, 2012 (index date). Time trends of different types of medicine prices (maximum allowed price, MRP, and actual wholesale price) were graphically analyzed, and actual wholesale price adjustments to the MRP changes and the budget impact of the GRP were assessed. Results In the 2-year study period, the long-term performance of the GRP system was associated with an approximate 45% decrease in the average MRP or an approximate 20% cost reduction. For each MRP update period, the GRP reduced the cost based on the maximum allowed price for approximately 30%. The wholesale price adjustments were mostly made for medicines priced above the MRP and reduced patients’ out-of-pocket cost. Conclusions In the long term, the GRP system effectively reduced medicine prices and the cost of reimbursed products. PMID:29740992

  1. Influence of generic reference pricing on medicine cost in Slovenia: a retrospective study.

    Science.gov (United States)

    Marđetko, Nika; Kos, Mitja

    2018-04-30

    To assess the impact of the generic reference pricing (GRP) system on the prices and cost of medicines in Slovenia approximately 8 years after its introduction in 2003 and before the implementation of the therapeutic reference pricing system. A retrospective study of all medicines (N=789) included in the GRP system on January 31, 2012 was performed. Medicine prices and cost were analyzed between January 31, 2012 and December 31, 2013 after every update (N=11) of the maximum reimbursable price (MRP) and were compared to the price and cost on January 31, 2012 (index date). Time trends of different types of medicine prices (maximum allowed price, MRP, and actual wholesale price) were graphically analyzed, and actual wholesale price adjustments to the MRP changes and the budget impact of the GRP were assessed. In the 2-year study period, the long-term performance of the GRP system was associated with an approximate 45% decrease in the average MRP or an approximate 20% cost reduction. For each MRP update period, the GRP reduced the cost based on the maximum allowed price for approximately 30%. The wholesale price adjustments were mostly made for medicines priced above the MRP and reduced patients' out-of-pocket cost. In the long term, the GRP system effectively reduced medicine prices and the cost of reimbursed products.

  2. 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…

  3. 48 CFR 15.407-1 - Defective certified cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ...—Modifications. The clauses give the Government the right to a price adjustment for defects in certified cost or... recognize that the Government's right to a price adjustment is not affected by any of the following... certified, cost or pricing data, the Government has the right, under the clauses at 52.215-10, Price...

  4. The Effects of Changing Input Costs on Food Prices

    OpenAIRE

    R. McFall Lamm; Paul C. Westcott

    1981-01-01

    The relationships between changes in food sector input costs and retail food prices are examined. Results indicate that increases in factor prices pass quickly to consumers, within two quarters for most foods. In addition, rising farm-level prices and substantial increases in nonfarm resource prices appear to explain why food prices rose more rapidly than nonfood prices in the 1970s. The analysis is based on a twenty-equation econometric model of the food-price determination process, specifie...

  5. 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.

  6. Marginal cost and congestion in the Italian electricity market: An indirect estimation approach

    International Nuclear Information System (INIS)

    Bigerna, Simona; Andrea Bollino, Carlo; Polinori, Paolo

    2015-01-01

    In this paper we construct an indirect measure of the supply marginal cost function for the main generators from the observed bid data in the Italian electricity market in the period 2004–2007. We compute the residual demand function for each generator, taking explicitly into account the issue of transmission line congestion. This procedure allows recovering correct zonal Lerner index and the implied measure of the marginal cost function. We find evidence of a stable U-shaped marginal cost function for three main Italian generators, but a flat function for ENEL, the former national monopolist. The policy relevance of our approach lies in the possibility to offer some empirical knowledge of the marginal cost function of each generator to the regulator to design appropriate policy measures geared to the promotion of competitive market conditions. We propose a new market surveillance mechanism, which is based on the principle of sanctioning excessive deviations from the estimated measure of the marginal cost function presented in this work. -- Highlights: •We construct an indirect measure of the supply marginal cost function. •We compute the residual demand function taking into account transmission line congestion. •We find a general evidence of a stable U-shaped marginal cost function for Italian generators. •We find flat marginal cost function for the former national monopolist. •We use excessive deviations from estimated marginal cost function as a new market surveillance mechanism

  7. 76 FR 35218 - Federal Acquisition Regulation; Information Collection; Cost or Pricing Data Requirements and...

    Science.gov (United States)

    2011-06-16

    ... Pricing Data, by any of the following methods: Regulations.gov : http://www.regulations.gov . Submit...; Information Collection; Cost or Pricing Data Requirements and Information Other Than Cost or Pricing Data... concerning cost or pricing data requirements and information other than cost or pricing data. Public comments...

  8. 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

  9. Margins in breast conserving surgery: The financial cost & potential savings associated with the new margin guidelines.

    Science.gov (United States)

    Singer, Lauren; Brown, Eric; Lanni, Thomas

    2016-08-01

    In this study, we compare the indications for re-excision, the findings of additional tumor in the re-excision specimen as they relate to margin status, and costs associated with re-excision based on recent new consensus statements. A retrospective analysis was performed on 462 patients with invasive breast carcinoma who underwent at least one lumpectomy between January 2011 and December 2013. Postoperative data was analyzed based on where additional disease was found, as it relates to the margin status of the initial lumpectomy and the additional direct costs associated with additional procedures. Of the 462 patients sampled, 149 underwent a re-excision surgery (32.2%). Four patients underwent mastectomy as their second operation. In the 40 patients with additional disease found on re-excision, 36 (90.0%) of them had a positive margin on their initial lumpectomy. None of the four mastectomy patients had residual disease. The mean cost of the initial lumpectomy for all 462 patients was $2118.01 plus an additional $1801.92 for those who underwent re-excision. A positive margin was most predictive of finding residual tumor on re-excision as would be expected. Using old criteria only 0.07% (4/61) of patients who had undergone re-excision with a 'clear' margin, had additional tumor found, at a total cost of $106,354.11. Thus, the new consensus guidelines will lead to less overall cost, at no clinical risk to patients while reducing a patient's surgical risk and essentially eliminating delays in adjuvant care. Copyright © 2016 Elsevier Ltd. All rights reserved.

  10. 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

  11. 48 CFR 970.1504-4 - Special cost or pricing areas.

    Science.gov (United States)

    2010-10-01

    ... 48 Federal Acquisition Regulations System 5 2010-10-01 2010-10-01 false Special cost or pricing areas. 970.1504-4 Section 970.1504-4 Federal Acquisition Regulations System DEPARTMENT OF ENERGY AGENCY... cost or pricing areas. ...

  12. Regional Marginal Abatement Cost Curves for NOx

    Data.gov (United States)

    U.S. Environmental Protection Agency — Data underlying the figures included in the manuscript "Marginal abatement cost curve for NOx incorporating controls, renewable electricity, energy efficiency and...

  13. 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/...

  14. Measuring the Cost of Supermarket Promotions

    DEFF Research Database (Denmark)

    Gao, Cixiu

    2014-01-01

    The widespread use of retail promotions and the magnitude of dollars spent on them call economists to examine the role of promotional costs in shaping the coordination of pricing and promotion decisions. In this study, I estimate the marginal cost of price promotion in the retail industry. The es...

  15. 48 CFR 52.215-11 - Price Reduction for Defective Certified Cost or Pricing Data-Modifications.

    Science.gov (United States)

    2010-10-01

    ... accordingly and the contract shall be modified to reflect the reduction. This right to a price reduction is... 48 Federal Acquisition Regulations System 2 2010-10-01 2010-10-01 false Price Reduction for... CONTRACT CLAUSES Text of Provisions and Clauses 52.215-11 Price Reduction for Defective Certified Cost or...

  16. 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

  17. 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...

  18. 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.

  19. The effects of utility DSM programs on electricity costs and prices

    Energy Technology Data Exchange (ETDEWEB)

    Hirst, E.

    1991-11-01

    More and more US utilities are running more and larger demand-side management (DSM) programs. Assessing the cost-effectiveness of these programs raises difficult questions for utilities and their regulators. Should these programs aim to minimize the total cost of providing electric-energy services or should they minimize the price of electricity? This study offers quantitative estimates on the tradeoffs between total costs and electricity prices. This study uses a dynamic model to assess the effects of energy-efficiency programs on utility revenues, total resource costs, electricity prices, and electricity consumption for the period 1990 to 2010. These DSM programs are assessed under alternative scenarios. In these cases, fossil-fuel prices, load growth, the amount of excess capacity the utility has in 1990, planned retirements of power plants, the financial treatment of DSM programs, and the costs of energy- efficient programs vary. These analyses are conducted for three utilities: a ``base`` that is typical of US utilities; a ``surplus`` utility that has excess capacity, few planned retirements, and slow growth in fossil-fuel prices and incomes; and a ``deficit`` utility that has little excess capacity, many planned retirements, and rapid growth in fossil-fuel prices and incomes. 28 refs.

  20. 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.

  1. 48 CFR 5252.215-9000 - Submission of cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ... pricing data. 5252.215-9000 Section 5252.215-9000 Federal Acquisition Regulations System DEPARTMENT OF THE... Clauses 5252.215-9000 Submission of cost or pricing data. As prescribed at 5215.407, insert the following provision: Submission of Cost or Pricing Data (NOV 1987) (a) It is expected that this contract will be...

  2. On cost-informed pricing and customer value: a resource-advantage perspective on industrial innovation pricing practices

    OpenAIRE

    Ingenbleek, Paul; Debruyne, Marion; Frambach, Ruud T.

    2001-01-01

    By empirically testing a framework of pricing strategies and their determinants in an industrial setting, Noble and Gruca (1999a) help to overcome the lack of empirical validation of pricing theory. In a commentary to the article, Cressman (1999) (1) expresses worries about the high percentage of firms that engages in cost-based pricing; (2) raises a definition question on value-based pricing; and (3) stresses that empirical pricing literature does not provide ideas on successful pricing prac...

  3. 48 CFR 15.403 - Obtaining certified cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ... or pricing data. 15.403 Section 15.403 Federal Acquisition Regulations System FEDERAL ACQUISITION REGULATION CONTRACTING METHODS AND CONTRACT TYPES CONTRACTING BY NEGOTIATION Contract Pricing 15.403 Obtaining certified cost or pricing data. ...

  4. Estimated generic prices of cancer medicines deemed cost-ineffective in England: a cost estimation analysis.

    Science.gov (United States)

    Hill, Andrew; Redd, Christopher; Gotham, Dzintars; Erbacher, Isabelle; Meldrum, Jonathan; Harada, Ryo

    2017-01-20

    The aim of this study was to estimate lowest possible treatment costs for four novel cancer drugs, hypothesising that generic manufacturing could significantly reduce treatment costs. This research was carried out in a non-clinical research setting using secondary data. There were no human participants in the study. Four drugs were selected for the study: bortezomib, dasatinib, everolimus and gefitinib. These medications were selected according to their clinical importance, novel pharmaceutical actions and the availability of generic price data. Target costs for treatment were to be generated for each indication for each treatment. The primary outcome measure was the target cost according to a production cost calculation algorithm. The secondary outcome measure was the target cost as the lowest available generic price; this was necessary where export data were not available to generate an estimate from our cost calculation algorithm. Other outcomes included patent expiry dates and total eligible treatment populations. Target prices were £411 per cycle for bortezomib, £9 per month for dasatinib, £852 per month for everolimus and £10 per month for gefitinib. Compared with current list prices in England, these target prices would represent reductions of 74-99.6%. Patent expiry dates were bortezomib 2014-22, dasatinib 2020-26, everolimus 2019-25 and gefitinib 2017. The total global eligible treatment population in 1 year is 769 736. Our findings demonstrate that affordable drug treatment costs are possible for novel cancer drugs, suggesting that new therapeutic options can be made available to patients and doctors worldwide. Assessing treatment cost estimations alongside cost-effectiveness evaluations is an important area of future research. Published by the BMJ Publishing Group Limited. For permission to use (where not already granted under a licence) please go to http://www.bmj.com/company/products-services/rights-and-licensing/.

  5. Computation of spot prices and congestion costs in large interconnected power systems

    International Nuclear Information System (INIS)

    Mukerji, R.; Jordan, G.A.; Clayton, R.; Haringa, G.E.

    1995-01-01

    Foremost among the new paradigms for the US utility industry is the ''poolco'' concept proposed by Prof. William W. Hogan of Harvard University. This concept uses a central pool or power exchange in which physical power is traded based on spot prices or market clearing prices. The rapid and accurate calculation of these ''spot'' prices and associated congestion costs for large interconnected power systems is the central tenet upon which the poolco concept is based. The market clearing price would be the same throughout the system if there were no system losses and transmission limitations did not exist. System losses cause small differences in market clearing prices as the cost of supplying a MW at various load buses includes the cost of losses. Transmission limits may cause large differences in market clearing prices between regions as low cost generation is blocked by the transmission constraints from serving certain loads. In models currently in use in the electric power industry spot price calculations range from ''bubble diagram'' type contract path models to full electrical representation such as GE-MAPS. The modeling aspects of the full electrical representation are included in the Appendix. The problem with the bubble diagram representation is that these models are liable to produce unacceptably large errors in the calculation of spot prices and congestion costs. The subtleties of the calculation of spot prices and congestion costs are illustrated in this paper

  6. 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

  7. Marginal abatement cost curves for NOx incorporating both controls and alternative measures

    Science.gov (United States)

    A marginal abatement cost curve (MACC) traces out the efficient marginal abatement cost level for any aggregate emissions target when a least cost approach is implemented. In order for it to represent the efficient MAC level, all abatement opportunities across all sectors and loc...

  8. Impact of carbon cost on wholesale electricity price: A note on price pass-through issues

    Energy Technology Data Exchange (ETDEWEB)

    Kim, Wook [Korea Southern Power Co., 167, Samsung-dong, Gangnam-gu, Seoul 135-791 (Korea); Chattopadhyay, Deb [Saha International, Level 26, 385 Bourke Street, Melbourne, VIC 3000 (Australia); Park, Jong-bae [Electrical Engineering Department, Konkuk University, 1 Hwayang-dong, Kwanggin-gu, Seoul 143-701 (Korea)

    2010-08-15

    Carbon costs - either in the form of a carbon tax or through permit prices in an emissions trading scheme - would ultimately be reflected in higher electricity prices. Carbon cost ''pass-through'' is critical to the survival of existing coal generation assets and has been discussed widely as a measure of business impact in the electricity industry. This paper sets out in a structured way the factors that determine price pass-through and why this may differ greatly across different systems. Although the basic concept of price pass-through is simple, a clear understanding of the underlying factors is critical to developing insights on how carbon cost would impact on existing coal generation businesses. It is shown that pass-through can vary drastically if the underlying dispatch potential of generators varies significantly across alternative emissions reduction scenarios. It can also vary depending on the availability of competing cleaner forms of generation. Pass-through as a measure of business performance is, therefore, hard to generalize across different circumstances and should be interpreted carefully. (author)

  9. Identifying cost-minimizing strategies for guaranteeing target dairy income over feed cost via use of the Livestock Gross Margin dairy insurance program.

    Science.gov (United States)

    Valvekar, M; Cabrera, V E; Gould, B W

    2010-07-01

    Milk and feed price volatility are the major source of dairy farm risk. Since August 2008 a new federally reinsured insurance program has been available to many US dairy farmers to help minimize the negative effects of adverse price movements. This insurance program is referred to as Livestock Gross Margin Insurance for Dairy Cattle. Given the flexibility in contract design, the dairy farmer has to make 3 critical decisions when purchasing this insurance: 1) the percentage of monthly milk production to be covered, 3) declared feed equivalents used to produce this milk, and 3) the level of gross margin not covered by insurance (i.e., deductible). The objective of this analysis was to provide an optimal strategy of how a dairy farmer could incorporate this insurance program to help manage the variability in net farm income. In this analysis we assumed that a risk-neutral dairy farmer wants to design an insurance contract such that a target guaranteed income over feed cost is obtained at least cost. We undertook this analysis for a representative Wisconsin dairy farm (herd size: 120 cows) producing 8,873 kg (19,545 lb) of milk/cow per year. Wisconsin statistical data indicates that dairy farms of similar size must require an income over feed cost of at least $110/Mg ($5/cwt) of milk to be profitable during the coverage period. Therefore, using data for the July 2009 insurance contract to insure $110/Mg of milk, the least cost contract was found to have a premium of $1.22/Mg ($0.055/cwt) of milk produced insuring approximately 52% of the production with variable monthly production covered during the period of September 2009 to June 2010. This premium represented 1.10% of the desired IOFC. We compared the above optimal strategy with an alternative nonoptimal strategy, defined as a contract insuring the same proportion of milk as the optimal (52%) but with a constant amount insured across all contract months. The premium was found to be almost twice the level obtained

  10. 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.

  11. Medium-term marginal costs in competitive generation power markets

    International Nuclear Information System (INIS)

    Reneses, J.; Centeno, E.; Barquin, J.

    2004-01-01

    The meaning and significance of medium-term marginal costs for a generation company in a competitive power market in analysed. A methodology to compute and decompose medium-term generation marginal costs in a competitive environment is proposed. The methodology is based on a market equilibrium model. The aim is to provide a useful tool for generation companies so that they can manage their resources in an optimal way, helping them with their operation, decision-making processes, asset valuations or contract assessments. (author)

  12. Price Reversal Pattern of ARV Drugs: A Transaction-Cost Approach Digression

    Directory of Open Access Journals (Sweden)

    Frank LORNE

    2015-05-01

    Full Text Available A price reversal pattern of ARV drugs was noted across lower and middle income countries in that the lower-income countries have higher prices relative to higher-income countries based on a 2008-2009 Summary Report by World Health Organization. The transaction costs affecting AVR drug pricing can be broadly classified into two kinds: One between the final users and the opinion/knowledge experts, and the other between the opinion/knowledge experts and the manufacturers. Economist’s version of price discrimination needs to be modified by including transaction costs. Transaction costs also point to institution creditability factors that will affect NGO procurement.

  13. 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

  14. The effects of utility DSM programs on electricity costs and prices

    Energy Technology Data Exchange (ETDEWEB)

    Hirst, E.

    1991-11-01

    More and more US utilities are running more and larger demand-side management (DSM) programs. Assessing the cost-effectiveness of these programs raises difficult questions for utilities and their regulators. Should these programs aim to minimize the total cost of providing electric-energy services or should they minimize the price of electricity This study offers quantitative estimates on the tradeoffs between total costs and electricity prices. This study uses a dynamic model to assess the effects of energy-efficiency programs on utility revenues, total resource costs, electricity prices, and electricity consumption for the period 1990 to 2010. These DSM programs are assessed under alternative scenarios. In these cases, fossil-fuel prices, load growth, the amount of excess capacity the utility has in 1990, planned retirements of power plants, the financial treatment of DSM programs, and the costs of energy- efficient programs vary. These analyses are conducted for three utilities: a base'' that is typical of US utilities; a surplus'' utility that has excess capacity, few planned retirements, and slow growth in fossil-fuel prices and incomes; and a deficit'' utility that has little excess capacity, many planned retirements, and rapid growth in fossil-fuel prices and incomes. 28 refs.

  15. 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

  16. Marginal abatement cost curves for NOx that account for ...

    Science.gov (United States)

    A marginal abatement cost curve (MACC) traces out the relationship between the quantity of pollution abated and the marginal cost of abating each additional unit. In the context of air quality management, MACCs typically are developed by sorting end-of-pipe controls by their respective cost effectiveness. Alternative measures, such as renewable electricity, energy efficiency, and fuel switching (RE/EE/FS), are not considered as it is difficult to quantify their abatement potential. In this paper, we demonstrate the use of an energy system model to develop a MACC for nitrogen oxides (NOx) that incorporates both end-of-pipe controls and these alternative measures. We decompose the MACC by sector, and evaluate the cost-effectiveness of RE/EE/FS relative to end-of-pipe controls. RE/EE/FS are shown to produce considerable emission reductions after end-of-pipe controls have been exhausted. Furthermore, some RE/EE/FS are shown to be cost-competitive with end-of-pipe controls. Demonstrate how the MARKAL energy system model can be used to evaluate the potential role of renewable electricity, energy efficiency and fuel switching (RE/EE/FS) in achieving NOx reductions. For this particular analysis, we show that RE/EE/FSs are able to increase the quantity of NOx reductions available for a particular marginal cost (ranging from $5k per ton to $40k per ton) by approximately 50%.

  17. 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

  18. 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

  19. Cost and Price Metrics for Automotive Lithium-Ion Batteries

    Energy Technology Data Exchange (ETDEWEB)

    None

    2017-02-01

    Values of current energy technology costs and prices, available from a variety of sources, can sometimes vary. While some of this variation can be due to differences in the specific materials or configurations assumed, it can also reflect differences in the definition and context of the terms "cost" and "price." This fact sheet illustrates and explains this latter source of variation in a case study of automotive lithium-ion batteries.

  20. 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...

  1. 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

  2. Transmission pricing and stranded costs in the electric power industry

    International Nuclear Information System (INIS)

    Baumol, W.J.; Sidak, J.G.

    1995-09-01

    Stranded costs are those costs that electric utilities are currently permitted to recover through their rates but whose recovery may be impeded or prevented by the advent of competition in the industry. Estimates of these costs run from the tens to the hundreds of billions of dollars. Should regulators permit utilities to recover stranded costs while they take steps to promote competition in the electric power industry. William Baumol and J. Gregory Sidak argue that answer to that question should be yes.The authors show that a transmission price, the price for sending electricity over the transmission grid, can be determined in a manner that is compatible with economic efficiency and clearly neutral in its effects upon all competitors in electricity generation. A correctly constructed regime of transmission pricing may in fact achieve the efficiency and equity goals that justify the recovery of stranded costs

  3. The Short- and Long-Run Marginal Cost Curve: A Pedagogical Note.

    Science.gov (United States)

    Sexton, Robert L.; And Others

    1993-01-01

    Contends that the standard description of the relationship between the long-run marginal cost curve and the short-run marginal cost curve is often misleading and imprecise. Asserts that a sampling of college-level textbooks confirms this confusion. Provides a definition and instructional strategy that can be used to promote student understanding…

  4. Marginal Hospital Cost of Surgery-related Hospital-acquired Pressure Ulcers.

    Science.gov (United States)

    Spector, William D; Limcangco, Rhona; Owens, Pamela L; Steiner, Claudia A

    2016-09-01

    Patients who develop hospital-acquired pressure ulcers (HAPUs) are more likely to die, have longer hospital stays, and are at greater risk of infections. Patients undergoing surgery are prone to developing pressure ulcers (PUs). To estimate the hospital marginal cost of a HAPU for adults patients who were hospitalized for major surgeries, adjusted for patient characteristics, comorbidities, procedures, and hospital characteristics. Data are from the Healthcare Cost and Utilization Project (HCUP) State Inpatient Databases and the Medicare Patient Safety Monitoring System for 2011 and 2012. PU information was obtained using retrospective structured record review from trained MPMS data abstractors. Costs are derived using HCUP hospital-specific cost-to-charge ratios. Marginal cost estimates were made using Extended Estimating Equations. We estimated the marginal cost at the 25th, 50th, and 75th percentiles of the cost distribution using Simultaneous Quantile Regression. We find that 3.5% of major surgical patients developed HAPUs and that the HAPUs added ∼$8200 to the cost of a surgical stay after adjusting for comorbidities, patient characteristics, procedures, and hospital characteristics. This is an ∼44% addition to the cost of a major surgical stay but less than half of the unadjusted cost difference. In addition, we find that for high-cost stays (75th percentile) HAPUs added ∼$12,100, whereas for low-cost stays (25th percentile) HAPUs added ∼$3900. This paper suggests that HAPUs add ∼44% to the cost of major surgical hospital stays, but the amount varies depending on the total cost of the visit.

  5. 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...

  6. 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.

  7. The marginal cost of public funds

    DEFF Research Database (Denmark)

    Kleven, Henrik Jacobsen; Kreiner, Claus Thustrup

    2006-01-01

    This paper extends the theory and measurement of the marginal cost of public funds (MCF) to account for labor force participation responses. Our work is motivated by the emerging consensus in the empirical literature that extensive (participation) responses are more important than intensive (hours...... of work) responses. In the modelling of extensive responses, we argue that it is crucial to account for the presence of non-convexities created by fixed work costs. In a non-convex framework, tax and transfer reforms give rise to discrete participation responses generating first-order effects...

  8. Equivalent oil price, equivalent gas price and CO2 cost

    International Nuclear Information System (INIS)

    Bacher, P.

    2008-01-01

    This article assess the magnitudes of costs to replace oil (and natural gas) in their fixed (heat) or mobile (transport) uses with energy savings or non CO 2 emitting energies. The price of oil (or gas) at which such measures would be profitable at is inferred, without any tax or subsidy, as well as the resulting CO 2 costs avoided. It shows that several of the actions considered in France and Europe to protect the climate are far from being the most economically justified. (author)

  9. MRI: unique costing and pricing issues.

    Science.gov (United States)

    Schwartz, H W; Jarl, D F

    1985-01-01

    Acquisition of magnetic resonance imaging (MRI) involves a plethora of costs not traditionally encountered in radiology procedure cost accounting models. Experiences with MRI gained at the University of Minnesota Hospitals and Clinics during 1984 uncovered a wide variety of unique costing issues which were eventually identified at the time when the MRI hospital charge was being established. Our experience at UMHC can provide those radiology departments now acquiring MRI with an earlier awareness of these special costing issues, hopefully resulting in better and more timely data collection. Current reimbursement and pricing issues are also having a dramatic impact on MRI costs at each institution and must be assessed in terms of third-party payor intentions.

  10. 73 Activity Based Costing and Product Pricing Decision: the Nigerian Case

    Directory of Open Access Journals (Sweden)

    Ebipanipre Gabriel Mieseigha

    2014-06-01

    Full Text Available This paper examined activity based costing and product pricing decisions in Nigeria so as to ascertain whether activity based costing have the ability to enhance profitability and control cost of manufacturing firms. Towards this end, a multiple correlation and regression estimation technique was used in analyzing the data obtained in the study. The study found that activity based costing affects product costing and pricing decision. In addition, the results showed that improved profitability and cost control can be achieved by implementing activity based costing approach by manufacturing firms. The implication is that traditional costing approach fails in many pricing situations by arbitrarily allocating indirect cost and activity based costing helps in allocating indirect cost accurately. Thus, it was recommended amongst others that activity based costing need to be practiced, maintained and implemented by manufacturing firms since it has a broad range of uses for a wide variety of company functions and operations in the area of process analysis, strategy support, time-based accounting, monitoring wastage, as well as quality and productivity management.

  11. Tariffs by marginal cost are the real economic values

    International Nuclear Information System (INIS)

    Santos, A.M. dos

    1989-01-01

    An analysis of the electric power tariffs by marginal cost in Brazilian sectors is presented with some considerations bout the economy, politics and a forecasting for 1995. Two tables with tariffs and costs are also shown. (author)

  12. Essays on microgrids, asymmetric pricing and market power in electricity markets

    Science.gov (United States)

    Lo Prete, Chiara

    This dissertation presents four studies of the electricity industry. The first and second essays use economic-engineering models to assess different aspects of microgrid penetration in regional electricity markets, while the last two studies contain empirical analyses aimed at evaluating the performance of wholesale electricity markets. Chapter 2 develops a framework to quantify economic, environmental, efficiency and reliability impacts of different power production scenarios in a regional system, focusing on the interaction of microgrids with the existing transmission and distribution grid. The setting is the regional network formed by Belgium, France, Germany and the Netherlands. The study presents simulations of power market outcomes under various policies and levels of microgrid penetration, and evaluates them using a diverse set of metrics. Chapter 3 studies the interaction between a microgrid and a regulated electric utility in a regional electricity market. I consider the interaction among the utility, the microgrid developer and consumers in the framework of cooperative game theory (assuming exchangeable utility), and use regional market models to simulate scenarios in which microgrid introduction may or may not be socially beneficial. Under the assumptions of this chapter, customer participation is essential to the development of socially beneficial microgrids, while the utility has little or no gain from it. Discussed incentives to avoid that utilities block microgrid entry include additional revenue drivers related to microgrid connection, decoupling and performance-based mechanisms targeted at service quality. When prices are below marginal costs of utility provided power, microgrid development may be socially beneficial, but unprofitable for microgrid customers and its developer. By imposing lower charges and higher remuneration for its services, the regulator could ensure that microgrid value is positive, without adversely impacting the utility

  13. Cost and Price Increases in Higher Education: Evidence of a Cost Disease on Higher Education Costs and Tuition Prices and the Implications for Higher Education Policy

    Science.gov (United States)

    Trombella, Jerry

    2011-01-01

    As concern over rapidly rising college costs and tuition sticker prices have increased, a variety of research has been conducted to determine potential causes. Most of this research has focused on factors unique to higher education. In contrast, cost disease theory attempts to create a comparative context to explain cost increases in higher…

  14. 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

  15. A Dynamic Economy with Costly Price Adjustment

    OpenAIRE

    Leif Danziger

    1998-01-01

    This paper studies a general-equilibrium model of a dynamic economy with menu costs. Each firm's productivity is exposed to idiosyncratic and aggregate productivity shocks around a trend, and the money supply to monetary shocks around a trend. All consumption, pricing, and production decisions are based on optimizing behavior. There exists a staggered Markov perfect equilibrium with prices determined by a two-sided (s,S) markup strategy. The paper analyzes the optimal markup strategy and inve...

  16. 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

  17. When to "Fire" Customers: Customer Cost-Based Pricing

    OpenAIRE

    Jiwoong Shin; K. Sudhir; Dae-Hee Yoon

    2012-01-01

    The widespread adoption of activity-based costing enables firms to allocate common service costs to each customer, allowing for precise measurement of both the cost to serve a particular customer and the customer's profitability. In this paper, we investigate how pricing strategies based on customer cost information affects a firm's customer acquisition and retention dynamics, and ultimately its profit, using a two-period monopoly model with high- and low-cost customer segments. Although past...

  18. Energy Prices and Internal Costs in Croatian Energy System Restructuring

    International Nuclear Information System (INIS)

    Potocnik, V. , Magdic, M.

    1995-01-01

    After social and political changes in 1990, energy prices in Croatia have been getting closer to the West European averages, faster than in the most European countries in transition. The energy prices for industry are almost at the West European level, while the energy prices of electricity and natural gas for households and those of the gasoline are well behind. If the population purchasing power parity (PPP) is taken into account, these relations change. While the internalization of external energy costs is under way in the developed world, it has not practically started yet in Croatia. The Croatian energy system restructuring shall require gradual adjustment of energy prices, together with multistage internalization of external energy costs. (author). 6 refs., 3 tabs., 2 figs

  19. 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

  20. 77 FR 2680 - Defense Federal Acquisition Regulation Supplement; Definition of Cost or Pricing Data

    Science.gov (United States)

    2012-01-19

    ... Regulation Supplement; Definition of Cost or Pricing Data AGENCY: Defense Acquisition Regulations System... Acquisition Regulation Supplement (DFARS) to update text addressing the definition of cost or pricing data... update the DFARS for consistency with FAR changes addressing the definition of cost or pricing data...

  1. 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)

  2. Price elasticity and medication use: cost sharing across multiple clinical conditions.

    Science.gov (United States)

    Gatwood, Justin; Gibson, Teresa B; Chernew, Michael E; Farr, Amanda M; Vogtmann, Emily; Fendrick, A Mark

    2014-11-01

    To address the impact that out-of-pocket prices may have on medication use, it is vital to understand how the demand for medications may be affected when patients are faced with changes in the price to acquire treatment and how price responsiveness differs across medication classes.  To examine the impact of cost-sharing changes on the demand for 8 classes of prescription medications. This was a retrospective database analysis of 11,550,363 commercially insured enrollees within the 2005-2009 MarketScan Database. Patient cost sharing, expressed as a price index for each medication class, was the main explanatory variable to examine the price elasticity of demand. Negative binomial fixed effect models were estimated to examine medication fills. The elasticity estimates reflect how use changes over time as a function of changes in copayments. Model estimates revealed that price elasticity of demand ranged from -0.015 to -0.157 within the 8 categories of medications (P  less than  0.01 for 7 of 8 categories). The price elasticity of demand for smoking deterrents was largest (-0.157, P  less than  0.0001), while demand for antiplatelet agents was not responsive to price (P  greater than 0.05). The price elasticity of demand varied considerably by medication class, suggesting that the influence of cost sharing on medication use may be related to characteristics inherent to each medication class or underlying condition.

  3. Pricing strategies for combination pediatric vaccines based on the lowest overall cost formulary.

    Science.gov (United States)

    Behzad, Banafsheh; Jacobson, Sheldon H; Sewell, Edward C

    2012-10-01

    This paper analyzes pricing strategies for US pediatric combination vaccines by comparing the lowest overall cost formularies (i.e., formularies that have the lowest overall cost). Three pharmaceutical companies compete pairwise over the sale of monovalent and combination vaccines. Particular emphasis is placed on examining the price of Sanofi Pasteur's DTaP-IPV/HIb under different conditions. The main contribution of the paper is to provide the lowest overall cost formularies for different prices of DTaP-IPV/HIb and other Sanofi Pasteur vaccines. The resulting analysis shows that DTaP-IPV/HIb could have been more competitively priced compared with the combination vaccine DTaP-HepB-IPV, for federal contract prices in 2009, 2010 and 2011. This study also proposes the lowest overall cost formularies when shortages of monovalent vaccines occur.

  4. Cost and price auditing: effectiveness in the procurement of defense services in Spain

    Directory of Open Access Journals (Sweden)

    José Aguado Romero

    Full Text Available Abstract Contract auditing, or cost and price auditing, has been applied in Spain as a means of determining prices in non-competitive defense contracts since 1989. Factors such as Spain's participation in international defense organizations, the characteristics of the defense market and the contractual legal framework for the procurement of defense goods and services help underscore the need for the Spanish Ministry of Defense to implement cost and price auditing. With the evolution of cost and price auditing in Spain in mind, this paper analyses the entire process, describes the audit procedures that are most commonly used today and assesses the main results achieved, in terms of financial savings. The results obtained show that cost and price auditing does indeed contribute to a more efficient use of public resources.

  5. 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

  6. 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

  7. The Dynamics of Bertrand Price Competition with Cost-Reducing Investments

    DEFF Research Database (Denmark)

    Iskhakov, Fedor; Rust, John; Schjerning, Bertel

    We present a dynamic extension of the classic static model of Bertrand price competition that allows competing duopolists to undertake cost-reducing investments in an attempt to “leapfrog” their rival to attain low-cost leadership – at least temporarily. We show that leapfrogging occurs in equili......We present a dynamic extension of the classic static model of Bertrand price competition that allows competing duopolists to undertake cost-reducing investments in an attempt to “leapfrog” their rival to attain low-cost leadership – at least temporarily. We show that leapfrogging occurs...... in equilibrium, resolving the Bertrand investment paradox., i.e. leapfrogging explains why firms have an ex ante incentive to undertake cost-reducing investments even though they realize that simultaneous investments to acquire the state of the art production technology would result in Bertrand price competition...... leader. We show that the equilibrium involves investment preemption only when the firms invest in a deterministically alternating fashion and technological progress is deterministic. We prove that when technological progress is deterministic and firms move in an alternating fashion, the game has a unique...

  8. Marginal abatement cost curves for policy recommendation – A method for energy system analysis

    International Nuclear Information System (INIS)

    Tomaschek, Jan

    2015-01-01

    The transport sector is seen as one of the key factors for driving future energy consumption and greenhouse gas (GHG) emissions. In order to rank possible measures marginal abatement cost curves have become a tool to graphically represent the relationship between abatement costs and emission reduction. This paper demonstrates how to derive marginal abatement cost curves for well-to-wheel GHG emissions of the transport sector considering the full energy provision chain and the interlinkages and interdependencies within the energy system. Presented marginal abatement cost curves visualize substitution effects between measures for different marginal mitigation costs. The analysis makes use of an application of the energy system model generator TIMES for South Africa (TIMES-GEECO). For the example of Gauteng province, this study exemplary shows that the transport sector is not the first sector to address for cost-efficient reduction of GHG emissions. However, the analysis also demonstrates that several options are available to mitigate transport related GHG emissions at comparable low marginal abatement costs. This methodology can be transferred to other economic sectors as well as to other regions in the world to derive cost-efficient GHG reduction strategies

  9. 77 FR 76939 - Defense Federal Acquisition Regulation Supplement: Definition of Cost or Pricing Data (DFARS Case...

    Science.gov (United States)

    2012-12-31

    ... cost or pricing data'' in its place. PART 217--SPECIAL CONTRACTING METHODS 217.7401 [Amended] 0 11... Cost or Pricing Data (DFARS Case 2011-D040) AGENCY: Defense Acquisition Regulations System, Department... ``certified cost or pricing data'' and ``data other than certified cost or pricing data.'' The DFARS changes...

  10. The effect of costs and regulation on electricity prices

    International Nuclear Information System (INIS)

    Schlaf, E.P.

    1991-01-01

    Two distinct econometric tests were performed to determine if state price regulation of public utilities has had a measurable impact on retail electricity prices. The results of both tests agree that, during the 1971-1985 period, average national electricity prices in each of the three major consuming sectors and the four Census regions were below the level which would have been preferred by profit-maximizing monopolists. Electricity consumers received price benefits during the sample period as a result of regulation. The first test of the effectiveness of state price regulation used a 'revealed preference' approach by comparing the actual prices set by regulatory commissioners with prices and outcomes predicted by three competing theories of regulatory motivation. The second test of the effectiveness of price regulation combined traditional cost function inputs with regulatory variables in reduced-form price equations to determine whether the amount of regulatory intensity, as measured by the number of staff members per regulated utility, is associated with declining electricity prices and whether appointed commissioners allow higher prices than elected commissioners

  11. Regional differences in China's CO2 abatement cost

    International Nuclear Information System (INIS)

    He, Xiaoping

    2015-01-01

    Under a framework of output distance function with multiple outputs, the study discusses the carbon abatement cost at provincial and regional levels in China, using the shadow price analysis. The findings show that the abatement cost, reflecting the marginal opportunity cost of carbon reduction, varies greatly among the provinces. On average, the abatement cost of the eastern region was much higher than that of the mid-western region during the observed period. The findings provide evidence that the carbon prices in the current ETS pilots have been much lower than desired levels, implying inefficiency of the markets. The wide range of the abatement cost estimates supports that the equi-marginal principle does not hold for the regulations on carbon pollution at regional levels. The regional cost differences indicate the huge potential for China to minimize the total abatement cost with policy instruments that may motive the emissions moving from areas of low abatement cost to where the abatement cost is higher. For a few undeveloped provinces that are environmentally fragile and have high abatement cost, supplementary measures will be needed to reduce the negative impact of carbon cutbacks on the poor to the minimum. - Highlights: • The marginal abatement cost of CO 2 is defined by the shadow price measure. • A linear programming model based on distance function is established. • Marginal abatement costs at provincial level are empirical investigated. • The abatement cost varies across provinces and regions in China. • The findings provide evidence that the current ETS pilots are inefficient

  12. 48 CFR 215.403-3 - Requiring information other than cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ... 48 Federal Acquisition Regulations System 3 2010-10-01 2010-10-01 false Requiring information other than cost or pricing data. 215.403-3 Section 215.403-3 Federal Acquisition Regulations System... CONTRACTING BY NEGOTIATION Contract Pricing 215.403-3 Requiring information other than cost or pricing data...

  13. 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...

  14. 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…

  15. A Methodology for Constructing Marginal Abatement Cost Curves for Climate Action in Cities

    Directory of Open Access Journals (Sweden)

    Nadine Ibrahim

    2016-03-01

    Full Text Available As drivers of climate action, cities are taking measures to reduce greenhouse gas (GHG emissions, which if left unabated pose a challenge to meeting long-term climate targets. The economics of climate action needs to be at the forefront of climate dialogue to prioritize investments among competing mitigation measures. A marginal abatement cost (MAC curve is an effective visualization of climate action that initiates a technical and economic discussion of the cost-effectiveness and abatement potential of such actions among local leaders, policy makers, and climate experts. More commonly demonstrated for countries, MAC curves need to be developed for cities because of their heterogeneity, which vary in their urban activities, energy supply, infrastructure stock, and commuting patterns. The methodology for constructing bottom-up MAC curves for cities is presented for technologies that offer fuel switching and/or energy efficiencies, while considering technology lifetimes, city-specific electricity and fuel prices, and emission intensities. Resulting MAC curves are unique to every city, and chart the pathway towards low-carbon growth by prioritizing measures based on cost-effectiveness. A case study of Toronto’s climate targets demonstrates the prioritization of select technologies. Leveraging MAC curves to support climate programs enables cities to strategically invest in financing climate action and designing incentives.

  16. 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...

  17. Funding Costs and Loan Pricing by Multinational Bank Affiliates

    Czech Academy of Sciences Publication Activity Database

    Derviz, Alexis

    2009-01-01

    Roč. 9, č. 9 (2009), s. 1-48 ISSN 1803-7070 Institutional research plan: CEZ:AV0Z10750506 Keywords : multinational banks * bank loan pricing * internal capital market Subject RIV: AH - Economics http://library.utia.cas.cz/separaty/2010/E/derviz- funding costs and loan pricing by multinational bank affiliates.pdf

  18. 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

  19. 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.

  20. 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.

  1. 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.

  2. The economic cost of fuel price subsidies in Ghana

    Science.gov (United States)

    Ofori, Roland Oduro

    I adapt the Harberger formula for deadweight loss to develop approximations for the deadweight loss created by multiple fuel price subsidies. I also estimate the own-price, cross-price, and income elasticities of demand for gasoline and diesel in Africa. I use data on fuel prices and sales in combination with my formulas and elasticity estimates to calculate the deadweight loss of fuel price subsidies in Ghana from 2009 to 2014. I show that the average efficiency cost of the gasoline and diesel price subsidies in Ghana is 0.8% of fuel price subsidy transfers. This result stresses the futility of basing subsidy reforms on economic efficiency losses, which are relatively small due to very inelastic energy demand, and the need for such reforms to be motivated by the poor-targeting of subsidies to low-income households and the impact of subsidies on government debt-financing.

  3. 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.

  4. 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.

  5. 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....

  6. 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)

  7. 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...

  8. Method of evaluation of solar collector cost under fuel price change

    International Nuclear Information System (INIS)

    Klychev, Sh. I.; Sadykova, N. S.; Saifiev, A. U.; Ismanzhanov, A. I.; Samiev, M.

    2013-01-01

    When we take into account the problems of large-scale use of solar energy, the matters of economic perspectives of solar plants in the future become vital. We present the method on whose basis evaluation of the cost of solar collectors is performed taking into account the change in the fuel prices. The method is based on the approach to evaluation of the cost of energy generated by the solar plants offered previously by the authors. Assuming that the components of expenditures for production are not changed, we obtained that the cost of solar collectors will grow, at approximately the same ratio as the growth of the prices for fuel (energy). Thus, the problem of creation of the economically effective solar collectors should be solved already today, at the existing prices for materials and fuel. At present, it is assumed that competitiveness of the solar plants will increase with the growth of the fuel prices. (authors)

  9. THE IMPLEMENTATION OF ACTIVITY-BASED COSTING METHOD IN DETERMINING SELLING PRICES

    Directory of Open Access Journals (Sweden)

    Muhtarudin Muhtarudin

    2017-08-01

    -Based Costing method. After applying the latter cost determining the method there turned out to be a significant difference in the shoe production cost resulted from the inaccurate price calculation in the former method, as here a selling price is fixed by marking-up efforts aiming to cover the production cost. Determining a selling price in this way causes the selling price to be too low; thus it cannot optimize the profit. Keywords: Activity-Based Costing; Production Cost; Selling Price

  10. On the Output-Inflation Relationship When Price and Quantity Adjustments are Costly

    DEFF Research Database (Denmark)

    Danziger, Leif; Kreiner, Claus Thustrup

    A vast literature analyzes the real effects of price-adjustment costs assuming that quantity adjustments are costless. In this paper, we analyze whether the presence of quantity-adjustments costs, which presumably are significant, change the traditional results on the impact of inflation....... In particular, recent findings suggest that quantity-adjustment costs may remove the linkage between output and inflation. We show that this is not the case when inflation is anticipated. On the contrary, quantity-adjustment costs may significantly amplify the consequences of price-adjustment costs...

  11. Market modeling for assessment of demand side programs using the marginal cost

    International Nuclear Information System (INIS)

    Papastamatiou, Panagiotis; Psarras, John

    2000-01-01

    Demand side management is nowadays considered as a functional step in the energy planning process. The criteria proposed for the assessment of the demand side programs (DSPs) are usually based on the balance between the marginal supply cost and the mean DSP cost. These criteria could not support the allotting of the invested capital to incentives for the consumers and advertising. This paper presents a methodology to support the utility planning at this point with more reliability. It proposes the expansion of the assessment criteria with the use of the marginal cost of the DSP. For the calculation of the DSP marginal cost, a dynamic model is developed and it is used for the simulation of the penetration of a DS Program. Using the 'least-cost' criterion as the decision rule for the simulation, the planner has a distribution of the available investment capital throughout the whole planning period. The use of the 'most-value' criterion supports the separation of the invested capital between incentives for the consumers and supportive expenses, e.g. advertising, marketing cost, etc. (Author)

  12. 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.

  13. 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.

  14. 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)

  15. 48 CFR 15.403-3 - Requiring data other than certified cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ... certified cost or pricing data. 15.403-3 Section 15.403-3 Federal Acquisition Regulations System FEDERAL ACQUISITION REGULATION CONTRACTING METHODS AND CONTRACT TYPES CONTRACTING BY NEGOTIATION Contract Pricing 15.403-3 Requiring data other than certified cost or pricing data. (a)(1) In those acquisitions that do...

  16. 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.

  17. 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

  18. Reflections on Costing, Pricing and Income Measurement at UK Higher Education Institutions

    Science.gov (United States)

    Oduoza, Chike F.

    2009-01-01

    In these days of radical contraction of funding and expansion in student numbers, universities are under pressure to prioritise their resources, as well as to achieve effective costing and pricing to support judgement and decision making for funding and any external work undertaken. This study reviews costing, pricing and income measurement in…

  19. Cost-price estimation of clinical laboratory services based on activity-based costing: A case study from a developing country.

    Science.gov (United States)

    Mouseli, Ali; Barouni, Mohsen; Amiresmaili, Mohammadreza; Samiee, Siamak Mirab; Vali, Leila

    2017-04-01

    It is believed that laboratory tariffs in Iran don't reflect the real costs. This might expose private laboratories at financial hardship. Activity Based Costing is widely used as a cost measurement instrument to more closely approximate the true cost of operations. This study aimed to determine the real price of different clinical tests of a selected private clinical laboratory. This study was a cross sectional study carried out in 2015. The study setting was the private laboratories in the city of Kerman, Iran. Of 629 tests in the tariff book of the laboratory (relative value), 188 tests were conducted in the laboratory that used Activity Based Costing (ABC) methodology to estimate cost-price. Analyzing and cost-price estimating of laboratory services were performed by MY ABCM software Version 5.0. In 2015, the total costs were $641,645. Direct and indirect costs were 78.3% and 21.7% respectively. Laboratory consumable costs by 37% and personnel costs by 36.3% had the largest share of the costing. Also, group of hormone tests cost the most $147,741 (23.03%), and other tests group cost the least $3,611 (0.56%). Also after calculating the cost of laboratory services, a comparison was made between the calculated price and the private sector's tariffs in 2015. This study showed that there was a difference between costs and tariffs in the private laboratory. One way to overcome this problem is to increase the number of laboratory tests with regard to capacity of the laboratories.

  20. Tax shift : eliminating subsidies and moving to full cost electricity pricing

    International Nuclear Information System (INIS)

    Gibbons, J.

    2008-01-01

    In order to ensure that Ontario's service needs are met at the lowest possible total cost, energy conservation and small-scale distributed generation options must be able to compete with large scale-centralized generation and transmission options on a level playing field. This report discussed how electricity is priced in Ontario. The report described the policies that subsidize coal and nuclear generation and promote excessive consumption of grid-supplied electricity. The report also presented an analysis of the impact of these subsidies and policies on Ontario's electricity consumption, electricity productivity, standard of living and air pollutant emissions. It described a practical strategy whereby these subsidies can be eliminated by recycling or shifting the monies currently spent on subsidies in a way that creates an incentive to reduce electricity consumption. It also described how full cost pricing could lead to a net financial benefit for residential customers as well as an adaptation strategy for businesses that would ensure that they remain competitive. Finally the report identified ten major subsidies that artificially reduce the cost of electricity in Ontario. These included below-market water royalty rates; corporate income tax revenue subsidy for nuclear debt; sales tax exemption; average cost pricing; and bulk metering. It was concluded that phasing out the subsidies for grid-supplied electricity and moving to full cost pricing will provide multiple benefits for Ontario. 36 refs., 5 tabs., 5 figs

  1. 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)

  2. 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

  3. Marginal Congestion Cost on a Dynamic Expressway Network

    DEFF Research Database (Denmark)

    Fosgerau, Mogens; Small, Kenneth A.

    2012-01-01

    a dynamic econometric model using unusually complete and accurate data from Danish motorways. We use the results to estimate the marginal external cost of adding a vehicle to a link's entry flow, finding it is highly influenced by the dynamic properties of the system of relationships between travel times......We formulate an empirical model of congestion for a series of sequential expressway links where queues may form and spill back. Its purpose is to disentangle the dynamic effect that a marginal vehicle has on the distribution of travel times experienced there and on connected links. We estimate...

  4. RJD A Cost Effective Frackless Solution For Production Enhancement In Marginal Fields

    Directory of Open Access Journals (Sweden)

    Ahmed Kamel

    2017-02-01

    Full Text Available With the worldwide trend of low oil prices high maturity of oil fields excessive cost of horizontal and fracking technologies and necessity for green drilling applications radial jet drilling RJD technology can be a cost effective and environmentally-friendly alternative. RJD is an unconventional drilling technique that utilizes coiled tubing conveyed tools and the energy of high velocity jet fluids to drill laterals inside the reservoir. In recent years rapid advances in high pressure water jet technology has tremendously increased its application in oil and gas industry not only in drilling operations to improve drilling rate and reduce drilling cost but also in production to maximize hydrocarbon recovery. In addition RJD can be used to bypass near wellbore damage direct reservoir treatmentsinjections improve water disposal and re-injection rates and assist in steam or CO2 treatments. This paper highlights the theoretical basis technological advancement procedures applications and challenges of high pressure water jets. Several worldwide case studies are discussed to evaluate the success results pros and cons of RJD. The results show that nearly an average of four to five fold production increase can be obtained. The present paper clearly shows that radial jet drilling is a viable and attractive alternative in marginal and small reservoirs that still have significant oil in place to capture the benefits of horizontal drillingfracking and to improve productivity from both new wells andor workover wells that cannot be produced with the existing expensive conventional completions.

  5. Pricing in M/M/1 queues when cost of waiting in queue differs from cost of waiting in service

    Directory of Open Access Journals (Sweden)

    Görkem Sarıyer

    2016-11-01

    Full Text Available Service providers can adjust the entrance price to the state of the demand in real life service systems where the customers' decision to receive the service, is based on this price, state of demand and other system parameters. We analyzed service provider's short and long term pricing problems in unobservable M/M/1 queues having the rational customers, where, for customers, the unit cost of waiting in the queue is higher than unit cost of waiting in the service. We showed that waiting in the queue has a clear negative effect on customers’ utilities, hence the service provider's price values. We also showed that, in the short term, monopolistic pricing is optimal for congested systems with high server utilization levels, whereas in the long term, market capturing pricing is more profitable.

  6. Competitive pricing in markets with different overhead costs : Concealment or leakage of cost information?

    NARCIS (Netherlands)

    Cardinaels, E.; Roodhooft, F.; Warlop, L.; Van Herck, G.

    2008-01-01

    This paper experimentally investigates how leaders and followers in a duopoly set prices for two product markets that have different overhead costs. In a fully crossed two‐by‐two design, we manipulate the participants' private cost report quality as either low or high, representing the extent to

  7. 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

  8. Production Costs of Alternative Transportation Fuels. Influence of Crude Oil Price and Technology Maturity

    Energy Technology Data Exchange (ETDEWEB)

    Cazzola, Pierpaolo; Morrison, Geoff; Kaneko, Hiroyuki; Cuenot, Francois; Ghandi, Abbas; Fulton, Lewis

    2013-07-01

    This study examines the production costs of a range of transport fuels and energy carriers under varying crude oil price assumptions and technology market maturation levels. An engineering ''bottom-up'' approach is used to estimate the effect of the input cost of oil and of various technological assumptions on the finished price of these fuels. In total, the production costs of 20 fuels are examined for crude oil prices between USD 60 and USD 150 per barrel. Some fuel pathways can be competitive with oil as their production, transport and storage technology matures, and as oil price increases. Rising oil prices will offer new opportunities to switch to alternative fuels for transport, to diversify the energy mix of the transport sector, and to reduce the exposure of the whole system to price volatility and potential distuption of supply. In a time of uncertainty about the leading vehicle technology to decarbonize the transport sector, looking at the fuel cost brings key information to be considered to keep mobility affordable yet sustainable.

  9. Social Security cost-of-living adjustments and the Consumer Price Index.

    Science.gov (United States)

    Burdick, Clark; Fisher, Lynn

    2007-01-01

    OASDI benefits are indexed for inflation to protect beneficiaries from the loss of purchasing power implied by inflation. In the absence of such indexing, the purchasing power of Social Security benefits would be eroded as rising prices raise the cost of living. By statute, cost-of-living adjustments (COLAs) for Social Security benefits are calculated using the Bureau of Labor Statistics (BLS) Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Some argue that this index does not accurately reflect the inflation experienced by the elderly population and should be changed to an elderly-specific price index such as the Experimental Consumer Price Index for Americans 62 Years of Age and Older, often referred to as the Consumer Price Index for the Elderly (CPI-E). Others argue that the measure of inflation underlying the COLA is technically biased, causing it to overestimate changes in the cost of living. This argument implies that current COLAs tend to increase, rather than merely maintain, the purchasing power of benefits over time. Potential bias in the CPI as a cost-of-living index arises from a number of sources, including incomplete accounting for the ability of consumers to substitute goods or change purchasing outlets in response to relative price changes. The BLS has constructed a new index called the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) that better accounts for those consumer adjustments. Price indexes are not true cost-of-living indexes, but approximations of cost-of-living indexes (COLI). The Bureau of Labor Statistics (2006a) explains the difference between the two: As it pertains to the CPI, the COLI for the current month is based on the answer to the following question: "What is the cost, at this month ' market prices, of achieving the standard of living actually attained in the base period?" This cost is a hypothetical expenditure-the lowest expenditure level necessary at this month's prices to achieve the

  10. Russian energy prices, taxes and costs 1993

    International Nuclear Information System (INIS)

    1994-01-01

    The Russian energy industry may be the country's most promising exporter, but it is struggling to free itself from the heavy regulation and economic distortions inherited from the Soviet era. This analysis examines Russian price and tax policies as well as production costs in 1993, and their effect on supply and demand in the oil, coal, gas and electricity sectors. The study underscores the broad consensus among both Western and Russian experts that primary energy prices should be lifted to world levels. It offers a framework for addressing the great question about how fast this should be done in a country undergoing a tremendous social and political transformation

  11. 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

  12. Multiarea Transmission Cost Allocation in Large Power Systems Using the Nodal Pricing Control Approach

    Directory of Open Access Journals (Sweden)

    M. Ghayeni

    2010-12-01

    Full Text Available This paper proposes an algorithm for transmission cost allocation (TCA in a large power system based on nodal pricing approach using the multi-area scheme. The nodal pricing approach is introduced to allocate the transmission costs by the control of nodal prices in a single area network. As the number of equations is dependent on the number of buses and generators, this method will be very time consuming for large power systems. To solve this problem, the present paper proposes a new algorithm based on multi-area approach for regulating the nodal prices, so that the simulation time is greatly reduced and therefore the TCA problem with nodal pricing approach will be applicable for large power systems. In addition, in this method the transmission costs are allocated to users more equitable. Since the higher transmission costs in an area having a higher reliability are paid only by users of that area in contrast with the single area method, in which these costs are allocated to all users regardless of their locations. The proposed method is implemented on the IEEE 118 bus test system which comprises three areas. Results show that with application of multi-area approach, the simulation time is greatly reduced and the transmission costs are also allocated to users with less variation in new nodal prices with respect to the single area approach.

  13. Benefit–cost analysis of non-marginal climate and energy projects

    International Nuclear Information System (INIS)

    Dietz, Simon; Hepburn, Cameron

    2013-01-01

    Conventional benefit–cost analysis incorporates the normally reasonable assumption that the policy or project under examination is marginal. Among the assumptions this entails is that the policy or project is small, so the underlying growth rate of the economy does not change. However, this assumption may be inappropriate in some important circumstances, including in climate-change and energy policy. One example is global targets for carbon emissions, while another is a large renewable energy project in a small economy, such as a hydropower dam. This paper develops some theory on the evaluation of non-marginal projects, with empirical applications to climate change and energy. We examine the conditions under which evaluation of a non-marginal project using marginal methods may be wrong, and in our empirical examples we show that both qualitative and large quantitative errors are plausible. - Highlights: • This paper develops the theory of the evaluation of non-marginal projects. • It also includes empirical applications to climate change and energy. • We show when evaluation of a non-marginal project using marginal methods is wrong

  14. Marginal cost calculation of energy production in hydro thermoelectric systems considering the transmission system

    International Nuclear Information System (INIS)

    Pereira, M.V.F.; Gorenstin, B.G.; Alvarenga Filho, S.

    1989-01-01

    The alternatives for calculation of energy marginal cost in hydroelectric systems, considering the transmission one, was analysed, including fundamental concepts; generation/transmission systems, represented by linear power flow model; production marginal costs in hydrothermal systems and computation aspects. (C.G.C.). 11 refs, 5 figs

  15. 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.

  16. Gasoline Prices, Transport Costs, and the U.S. Business Cycles

    OpenAIRE

    Hakan Yilmazkuday

    2014-01-01

    The e¡èects of gasoline prices on the U.S. business cycles are investigated. In order to distinguish between gasoline supply and gasoline demand shocks, the price of gasoline is endogenously determined through a transportation sector that uses gasoline as an input of production. The model is estimated for the U.S. economy using five macroeconomic time series, including data on transport costs and gasoline prices. The results show that although standard shocks in the literature (e.g., technolo...

  17. Activity-based costing for pathology examinations and comparison with the current pricing system in Turkey.

    Science.gov (United States)

    Ergün, Ferda A K; Ağirbaş, Ismail; Kuzu, Işınsu

    2013-01-01

    To demonstrate the real cost data of the pathology examinations by using the activity-based costing method and to contribute to the financial planning of the departments, health managers and also the social security institution. Forty-four examinations selected from the Healthcare Implementation Notification system list and performed at the Ankara University Faculty of Medicine Pathology Department during September 2010 were studied. The analysis and the real cost calculations were done according to the duration of the procedures. Calculated costs were compared with the Healthcare Implementation Notification system and Medicare price lists. The costs of the pathology tests listed within the same pricing levels in the Healthcare Implementation Notification system list showed great differences. The minimum and maximum costs in level 1, 2, 3, and 4 were 15,98-80,15 TL, 15,95-258,59 TL, 42,38- 236,87 TL, and 124,42-406,76 TL, respectively. Medicare price levels were more consistent with the real costs of the examinations compared to the Healthcare Implementation Notification system price list. The prices of the pathology examination listed at different levels in the Healthcare Implementation Notification system lists do not cover the real costs of the work done. The principal parameters of Activity-Based Costing system are more suitable for making the most realistic cost categorization. Although the prices could differ between countries, the Medicare system categories are more realistic than the Healthcare Implementation Notification system. The Healthcare Implementation Notification system list needs to be revised in order to reflect the real costs of the pathology examinations.

  18. 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

  19. 10 CFR 600.145 - Cost and price analysis.

    Science.gov (United States)

    2010-01-01

    ... DEPARTMENT OF ENERGY (CONTINUED) ASSISTANCE REGULATIONS FINANCIAL ASSISTANCE RULES Uniform Administrative Requirements for Grants and Cooperative Agreements With Institutions of Higher Education, Hospitals, and Other... quotations submitted, market prices and similar indicia, together with discounts. Cost analysis is the review...

  20. Purchasing motors under consideration of full-cost pricing

    International Nuclear Information System (INIS)

    Mauchle, P.; Ritz, Ch.

    2007-01-01

    This final report for the Swiss Federal Office of Energy (SFOE) takes a look at how full-cost pricing should be considered when purchasing electric motors. The authors consider it essential that the overall life-cycle costs are carefully considered. This also guarantees economical operation and enables users to avoid unexpected costs throughout the service life of the motor. The aim of this project was to provide industrial companies with suitable tools for calculating the overall life-cycle costs of motors at the time of their acquisition. These tools take the form of a sample 'Call for Tender' for motors along with software for calculating life-cycle costs. The factors involved, such as investment, installation costs, energy and environmental costs as well as operational, maintenance and disposal costs are examined.

  1. Fuel price impacts and compliance costs associated with the Renewable Fuel Standard (RFS)

    International Nuclear Information System (INIS)

    Christensen, Adam; Siddiqui, Sauleh

    2015-01-01

    US policy instruments concerning vehicle biofuels are currently being revisited. For example, as part of an on-going annual Renewable Fuel Standard (RFS) implementation, the Environmental Protection Agency (EPA) requests stakeholder feedback/analysis of programmatic effects, including impacts on gasoline/diesel prices and compliance costs. Motivated by the need for regulatory-specific feedback, a novel regional market model is developed that quantifies price impacts across different regional markets for a number of market variables, including several types of compliance certificates known as Renewable Identification Numbers (RINs). An analysis of the most recent EPA proposal suggests that the D4 (biodiesel) RIN price could rise to >$1.00/RIN. Sensitivity results show that the D4 RIN price is highly sensitive to soybean oil prices, while D5/D6 RIN prices are most sensitive to the volume of E85 consumed. It was found that the projected costs associated with the RFS in 2017 could be reduced by approximately 50% if an additional 600 million gallons of E85 were consumed. The analysis also suggests that the RFS does not dramatically affect the retail price of either gasoline and diesel fuels paid by consumers. - Highlights: • The most recent EPA could cause the biodiesel RIN price to rise to >$1.00/RIN. • D5/D6 RIN prices are most sensitive to the volume of E85 consumed. • Retail prices for fuel do not change dramatically. • 2017 compliance costs could fall by 50% if more E85 were consumed.

  2. Internalizing external environmental costs of agriculture into product prices, Case study for milk and potatoes

    NARCIS (Netherlands)

    Masselink, Dirk Jan

    2007-01-01

    Society has to pay large amounts of money to compensate for the environmental damages caused by farm emissions. These external costs are not fully accounted for in product prices and internalization of these external costs into the cost price of agricultu

  3. 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.

  4. Crowdsourcing healthcare costs: Opportunities and challenges for patient centered price transparency.

    Science.gov (United States)

    Meisel, Zachary F; VonHoltz, Lauren A Houdek; Merchant, Raina M

    2016-03-01

    Efforts to improve health care price transparency have garnered significant attention from patients, policy makers, and health insurers. In response to increasing consumer demand, state governments, insurance plans, and health care providers are reporting health care prices. However, such data often do not provide consumers with the most salient information: their own actual out-of-pocket cost for medical care. Although untested, crowdsourcing, a mechanism for the public to help answer complex questions, represents a potential solution to the problem of opaque hospital costs. This article explores, the challenges and potential opportunities for crowdsourcing out-of-pocket costs for healthcare consumers. Copyright © 2015 Elsevier Inc. All rights reserved.

  5. 26 CFR 1.994-2 - Marginal costing rules.

    Science.gov (United States)

    2010-04-01

    ... supplier (as defined in § 1.994-1(a)(3)(ii)) chooses, provided that the requirements of both subparagraphs... with Y whereby Y is granted a sales franchise with respect to exporting such product line from which...), combined taxable income under marginal costing is limited to $28.50. Since under the franchise agreement Y...

  6. Asset Prices and Trading Volume under Fixed Transactions Costs.

    Science.gov (United States)

    Lo, Andrew W.; Mamaysky, Harry; Wang, Jiang

    2004-01-01

    We propose a dynamic equilibrium model of asset prices and trading volume when agents face fixed transactions costs. We show that even small fixed costs can give rise to large "no-trade" regions for each agent's optimal trading policy. The inability to trade more frequently reduces the agents' asset demand and in equilibrium gives rise to a…

  7. 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.

  8. 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,...

  9. 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

  10. Thresholds for decision-making: informing the cost-effectiveness and affordability of rotavirus vaccines in Malaysia.

    Science.gov (United States)

    Loganathan, Tharani; Ng, Chiu-Wan; Lee, Way-Seah; Hutubessy, Raymond C W; Verguet, Stéphane; Jit, Mark

    2018-03-01

    Cost-effectiveness thresholds (CETs) based on the Commission on Macroeconomics and Health (CMH) are extensively used in low- and middle-income countries (LMICs) lacking locally defined CETs. These thresholds were originally intended for global and regional prioritization, and do not reflect local context or affordability at the national level, so their value for informing resource allocation decisions has been questioned. Using these thresholds, rotavirus vaccines are widely regarded as cost-effective interventions in LMICs. However, high vaccine prices remain a barrier towards vaccine introduction. This study aims to evaluate the cost-effectiveness, affordability and threshold price of universal rotavirus vaccination at various CETs in Malaysia. Cost-effectiveness of Rotarix and RotaTeq were evaluated using a multi-cohort model. Pan American Health Organization Revolving Fund's vaccine prices were used as tender price, while the recommended retail price for Malaysia was used as market price. We estimate threshold prices defined as prices at which vaccination becomes cost-effective, at various CETs reflecting economic theories of human capital, societal willingness-to-pay and marginal productivity. A budget impact analysis compared programmatic costs with the healthcare budget. At tender prices, both vaccines were cost-saving. At market prices, cost-effectiveness differed with thresholds used. At market price, using 'CMH thresholds', Rotarix programmes were cost-effective and RotaTeq were not cost-effective from the healthcare provider's perspective, while both vaccines were cost-effective from the societal perspective. Using other CETs, both vaccines were not cost-effective at market price, from the healthcare provider's and societal perspectives. At tender and cost-effective prices, rotavirus vaccination cost ∼1 and 3% of the public health budget, respectively. Using locally defined thresholds, rotavirus vaccination is cost-effective at vaccine prices in line

  11. 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...

  12. Historical Cost Dan General Price Level Accounting: Analisis Relevansi Indikator Keuangan

    OpenAIRE

    -, Meythi; Teresa, Sheffie

    2012-01-01

    In conventional accounting, financial statements are based on the historical cost principle that assumes that prices (monetary unit) are stable. Conventional accounting recognizes neither changes in the general price level nor changes in the specific price level. Consequently, if there are any changes in purchasing power such as in inflation period, the historical financial statement are not economically relevant and also income is usually overstated, and the fixed assets are usually understa...

  13. 17 CFR 229.1204 - (Item 1204) Oil and gas production, production prices and production costs.

    Science.gov (United States)

    2010-04-01

    ... production, production prices and production costs. 229.1204 Section 229.1204 Commodity and Securities... production, production prices and production costs. (a) For each of the last three fiscal years disclose... production cost, not including ad valorem and severance taxes, per unit of production. Instruction 1 to Item...

  14. 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)

  15. Real time pricing as a component of least-cost power strategies

    International Nuclear Information System (INIS)

    Caramanis, M.C.; Tabors, R.D.; Daryanian, B.

    1991-01-01

    This paper reports on Real Time Pricing (RTP) that is an electricity rate which varies with time in order to reflect the electric utility's time varying costs of generation, transmission, and distribution. Because RTP improves the economic efficiency of overall operation of the electric system, it can provide benefits to both the utility and the customers. It is a strategic tool which provides customers with the same type of cost and load management signals that are provided to the electric supply system. It is a critical element in economically efficient least-cost strategies because it provides the customer with symmetric signals that encourage both reduction in consumption (high prices) and also increases in consumption (low prices). This characteristic of symmetry makes it a unique method relative to others in the field of conservation and load management because RTP can be used to dispatch the customers; load, not merely turn it off when and if required by the utility. In the process of developing and implementing least-cost strategies, RTP can provide significant incremental benefits to existing demand-side as well as supply-side programs

  16. 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)

  17. 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

  18. How costly is mitigation of non-CO{sub 2} greenhouse gas emissions from agriculture? A meta-analysis

    Energy Technology Data Exchange (ETDEWEB)

    Vermont, Bruno; De Cara, Stephane [INRA, UMR 210 Economie Publique INRA-AgroParisTech, Thiverval-Grignon (France)

    2010-05-15

    This text reviews the assessments of marginal abatement costs of methane and nitrous oxide emissions from agriculture. We use agricultural emissions and the corresponding prices collected from 21 studies that have assessed abatement potentials and costs using various modeling approaches and assumptions. We first highlight the implications of the modeling approach for marginal abatement costs. Harmonized abatement rates for three emission prices (10, 20 and 50 EUR{sub 2005}/tCO{sub 2}eq) are regressed on variables that reflect various modeling assumptions and study characteristics. In a second step, the emission price is introduced as an explanatory variable. When controlling for a few key characteristics of the studies, the models explain an important share of the observed variability in abatement rates. The type of modeling approach is found to have a significant effect. In particular, we find that equilibrium models lead to higher abatement rates for a given price. The flexibility in nitrogen use and its effect on crop yields also plays a significant role in lowering marginal abatement costs. The results of the second step indicate that the price elasticity of the abatement rate is about 0.6. This estimate is found to be robust to several specifications and consistent with previous assessments covering other economic sectors. (author)

  19. International perspectives on the importance of electric tariff transitioning to cost-based levels in Bulgaria

    International Nuclear Information System (INIS)

    Simpson, T.; Davis, F.; Dilovska, I.

    1996-01-01

    The traditional cost-of-service approach to power pricing has been replaced in many countries by market pricing mechanisms that compensate power producers at the marginal cost of production established collectively in the marketplace. The paper stresses the importance of cost-based tariff setting pointing out two main pricing principles of utility services: 1) Revenues must meet or exceed the utility average cost of production; 2) Marginal cost pricing for incremental consumption must ensure efficient allocation of resources. Examples describing the factors encouraging transition to economically efficient tariffs at a small utility are given for: Northwest U.S., MINENERGO in Belarus, Pacific Gas and Electric Co in California and the National Electric Co (NEK) in Bulgaria.The analysis of the Bulgarian electric sector is based on ongoing work being funded by the U.S. Agency for International Development. Each of the four utilities described faces a different challenge for transitioning tariffs to cost- based levels. However, one and the same broad conclusion applies in all cases: utility pricing must take into account the underlying average and marginal cost structures of the regional power industry. Bulgaria needs transition to cost-based tariffs to recover the electricity cost-of-service and to ensure that the electric sector operates efficiently and consumers are treated fairly. Measures that facilitate the process of tariff transitioning include: 1) Developing a transparent process of tariff setting with clear objectives, a plan and timetable, and roles of organizations; 2) Establishing of independent regulation to ensure that tariff setting objectives are achieved; 3) Instituting mechanisms to reward organizations for performance that achieves electric sector objectives. 3 figs

  20. The cost of domestic energy prices to Saudi Arabia

    International Nuclear Information System (INIS)

    Alyousef, Yousef; Stevens, Paul

    2011-01-01

    The issue of subsidies on domestic energy prices has moved up the policy agenda, most recently as a result of the G20 commitment in September 2009 to phase out such subsidies. However, what constitutes a 'subsidy' is complex and controversial. The IEA in its last World Energy Outlook claimed that Saudi Arabia was second in the world in terms of its levels of subsidy on domestic energy prices. However, because Saudi Arabia is a price maker in the international oil market, the methodology used by the IEA is seriously flawed. This paper explains the problems with the methodology for computing subsidies and explains the correct method in the case of Saudi Arabia. It then attempts to measure the levels of subsidy in Saudi Arabia using this methodology. However, while it converts the IEA's 'subsidy' of $23 billion into a net 'profit' of $5.7 billion, it goes on to point out that the current low price regime is causing problems for Saudi Arabia. - Highlights: → How to define energy subsidies in the context of Saudi Arabia as the price maker for international oil prices? → How far do the low domestic energy price in Saudi Arabia represent subsidized prices? → What are the costs and benefits of low/subsidized domestic energy prices in Saudi Arabia? → What policy options are available to offset the very poor record of energy efficiency in Saudi Arabia?

  1. Cost accounting models used for price-setting of health services: an international review.

    Science.gov (United States)

    Raulinajtys-Grzybek, Monika

    2014-12-01

    The aim of the article was to present and compare cost accounting models which are used in the area of healthcare for pricing purposes in different countries. Cost information generated by hospitals is further used by regulatory bodies for setting or updating prices of public health services. The article presents a set of examples from different countries of the European Union, Australia and the United States and concentrates on DRG-based payment systems as they primarily use cost information for pricing. Differences between countries concern the methodology used, as well as the data collection process and the scope of the regulations on cost accounting. The article indicates that the accuracy of the calculation is only one of the factors that determine the choice of the cost accounting methodology. Important aspects are also the selection of the reference hospitals, precise and detailed regulations and the existence of complex healthcare information systems in hospitals. Copyright © 2014 Elsevier Ireland Ltd. All rights reserved.

  2. Marginal abatement cost curve for NOx incorporating controls, renewable electricity, energy efficiency and fuel switching

    Science.gov (United States)

    A marginal abatement cost curve (MACC) traces out the relationship between the quantity of pollution abated and the marginal cost of abating each additional unit. In the context of air quality management, MACCs typically are developed by sorting end-of-pipe controls by their resp...

  3. Marginal abatement cost curve for NOx incorporating controls, renewable electricity, energy efficiency and fuel switching

    Science.gov (United States)

    A marginal abatement cost curve (MACC) traces out the relationship between the quantity of pollution abated and the marginal cost of abating each additional unit. In the context of air quality management, MACCs typically are developed by sorting end-of-pipe controls by their rela...

  4. 48 CFR 52.215-13 - Subcontractor Certified Cost or Pricing Data-Modifications.

    Science.gov (United States)

    2010-10-01

    ... cost or pricing data at FAR 15.403-4, on the date of agreement on price or the date of award, whichever... nature and amount of any contingencies included in the price), unless an exception under FAR 15.403-1... prescribed in FAR 15.406-2 that, to the best of its knowledge and belief, the data submitted under paragraph...

  5. 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.

  6. 48 CFR 5215.804-3 - Exemptions from or waiver of submission of certified cost or pricing data.

    Science.gov (United States)

    2010-10-01

    ... of submission of certified cost or pricing data. 5215.804-3 Section 5215.804-3 Federal Acquisition... 5215.804-3 Exemptions from or waiver of submission of certified cost or pricing data. (a) General. As explained in 5215.402, cost or pricing data would not normally be obtained because the predominant portion...

  7. Incorporating the value of changes in price volatility into cost-benefit analysis-an application to oil prices in the transport sector

    Energy Technology Data Exchange (ETDEWEB)

    Jensen, Thomas C., E-mail: tcj@transport.dtu.d [Department of Transport, Danish Technical University, Bygningstorvet 116 Vest, 2800 Lyngby (Denmark); Moller, Flemming [National Environmental Research Institute, Box 358, Frederiksborgvej 399, 4000 Roskilde (Denmark)

    2010-01-15

    This paper contains a tentative suggestion of how to take into account the value of changes in price volatility in real world cost-benefit analyses. Price volatility is an important aspect of security of supply which first of all concerns physical availability, but assuming that consumers are risk averse, security of supply can also be viewed as a matter of avoiding oscillations in consumption originating from volatile prices of for instance oil. When the government makes transport-related choices on behalf of the consumers, the effect on oscillations in general consumption should be included in the policy assessment taking into account the most significant correlations between prices of alternative fuels and between fuel prices and consumption in general. In the present paper, a method of valuing changes in price volatility based on portfolio theory is applied to some very simple transport-related examples. They indicate that including the value of changes in price volatility often makes very little difference to the results of cost-benefit analyses, but more work has to be done on quantifying, among other things, consumers' risk aversion and the background standard deviation in total consumption before firm conclusions can be drawn.

  8. Incorporating the value of changes in price volatility into cost-benefit analysis. An application to oil prices in the transport sector

    Energy Technology Data Exchange (ETDEWEB)

    Jensen, Thomas C. [Department of Transport, Danish Technical University, Bygningstorvet 116 Vest, 2800 Lyngby (Denmark); Moeller, Flemming [National Environmental Research Institute, Box 358, Frederiksborgvej 399, 4000 Roskilde (Denmark)

    2010-01-15

    This paper contains a tentative suggestion of how to take into account the value of changes in price volatility in real world cost-benefit analyses. Price volatility is an important aspect of security of supply which first of all concerns physical availability, but assuming that consumers are risk averse, security of supply can also be viewed as a matter of avoiding oscillations in consumption originating from volatile prices of for instance oil. When the government makes transport-related choices on behalf of the consumers, the effect on oscillations in general consumption should be included in the policy assessment taking into account the most significant correlations between prices of alternative fuels and between fuel prices and consumption in general. In the present paper, a method of valuing changes in price volatility based on portfolio theory is applied to some very simple transport-related examples. They indicate that including the value of changes in price volatility often makes very little difference to the results of cost-benefit analyses, but more work has to be done on quantifying, among other things, consumers' risk aversion and the background standard deviation in total consumption before firm conclusions can be drawn. (author)

  9. Incorporating the value of changes in price volatility into cost-benefit analysis. An application to oil prices in the transport sector

    International Nuclear Information System (INIS)

    Jensen, Thomas C.; Moeller, Flemming

    2010-01-01

    This paper contains a tentative suggestion of how to take into account the value of changes in price volatility in real world cost-benefit analyses. Price volatility is an important aspect of security of supply which first of all concerns physical availability, but assuming that consumers are risk averse, security of supply can also be viewed as a matter of avoiding oscillations in consumption originating from volatile prices of for instance oil. When the government makes transport-related choices on behalf of the consumers, the effect on oscillations in general consumption should be included in the policy assessment taking into account the most significant correlations between prices of alternative fuels and between fuel prices and consumption in general. In the present paper, a method of valuing changes in price volatility based on portfolio theory is applied to some very simple transport-related examples. They indicate that including the value of changes in price volatility often makes very little difference to the results of cost-benefit analyses, but more work has to be done on quantifying, among other things, consumers' risk aversion and the background standard deviation in total consumption before firm conclusions can be drawn. (author)

  10. Practice Management Analysis Of Costs And Price Formation In Clothing Cluster - PE

    Directory of Open Access Journals (Sweden)

    Juliana Gonçalves de Araujo

    2016-12-01

    Full Text Available The aim of this study is to verify the level of use of practices related to the management of costs and price formation by the managers of the Local Productive Arrangement (APL Clothing of Pernambuco. The sample consisted of 52 companies, and the results point to a still unsatisfactory trend of cost management procedures, whereas the minority use of all the tools and adopting do informally. The significant associations found between the analysis variables were related to non-trading price of those respondents who said they adopt differentiation strategy (higher quality, and the use of costing methods by those respondents who do not adopt the low-cost strategy. It was found that those who use any funding arrangements tend not to adopt the low-cost strategy, preferring not to give up the product quality for lower costs.

  11. 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...

  12. The integration of price/cost modelling and construction planning - the automated generation of construc­tion operation

    Directory of Open Access Journals (Sweden)

    P. A. Bowen

    1997-07-01

    Full Text Available The fact that traditional price/cost models are unrelated to the construction process renders them largely unsuited to the provision of meaningful price/cost advice. The nature and lengthiness of the construction planning process has precluded its incorporation into price/cost modelling during the pre-tender phase of the traditional building procurement process. The nub of the modelling problem has been how to integrate the complex process of construction planning into the pre-tender price/cost modelling process. In this paper the authors propose the synthesis of artificial intelligence techniques and construction planning techniques, resulting in a conceptual framework for a network-based cost modelling system for use by quantity surveyors in the cost modelling of buildings.

  13. US firms still restructuring, cutting costs under oil price uncertainty

    International Nuclear Information System (INIS)

    Koen, A.D.

    1994-01-01

    Despite more than a decade of downsizing, continuing uncertainty in oil markets is forcing US petroleum companies into another round of cutting and restructuring operations. Wellhead gas prices in the US, although still volatile, in the past 2 years have risen to levels adequate to allow profits for most producers in that sector. Higher gas reserves valuations have strengthened producers' overall balance sheets. But the slide in oil prices from the middle of fourth quarter 1993 until the recent upswing the past month has withered producers' financial performances and reserves values. With little prospect of significantly higher oil prices anytime soon, US companies feel they have little choice but to continue pressing cost cutting moves in order to sustain profits in the near term while at the same time earnings a higher return on investment in the long term. Petroleum company executives are overlooking almost no operating or investment strategy thought capable of bolstering the bottom line. Because no two US oil and gas companies are alike, each profit protection plan is a unique mix of similar solutions. Oil and gas production companies most often try to lower operating costs by vigorously selling noncore properties or business units and reducing staff. The paper discusses measures taken by oil and gas companies to lower costs

  14. Penentuan Harga Jual Produk dengan Menggunakan Metode Cost Plus Pricing pada Ud. Vanela

    OpenAIRE

    Mawikere, Lidia; Ilat, Ventje; Woran, Reza

    2014-01-01

    Harga jual yang ditetapkan harus mampu menentukan semua biaya yang menghasilkan laba jangka panjang. Cost plus pricing adalah penetapan harga dengan menambahkan sejumlah (persentase) tertentu dari harga jual atau biaya sebagai keuntungannya. Tujuan penelitian ini adalah untuk mengetahui bagaimana Perusahaan menentukan harga jual produk dengan menggunakan metode cost plus pricing pada UD. Vanela. Dalam penganalisaan data digunakan metode deskriptif kuantitatif. Hasil penelitian menunjukan UD. ...

  15. Marginal CO2 reduction cost in ENERGY 2000 development. A socio-economic evaluation of the marginal cost for the alternative reduction methods

    International Nuclear Information System (INIS)

    Maeng, H.

    1995-01-01

    The official Danish environmental plan involves a reduction of CO 2 within the next 30-50 years. This report describes the analysis of socio-economic cost/consequences of marginal CO 2 reduction by means of various technical solution models. Calculations by means of the special program subroutine SAMFOKO are based on energy balance in annual, monthly, daily and hourly scale. Heat and power savings as well as the development of decentralized power plants are considered in the supply model. Socio-economic consequences in form of charges and cost are discussed. (EG)

  16. Economic assessment of Operational Energy reduction options in a house using Marginal Benefit and Marginal Cost: A case in Bangi, Malaysia

    International Nuclear Information System (INIS)

    Wan Rahmah Mohd Zaki; Abdul Hadi Nawawi; Sabarinah Sh Ahmad

    2010-01-01

    Energy Efficient (EE) appliances such as Compact Fluorescent Light (CFL) bulbs and Renewable Energy (RE), namely solar Photovoltaic (PV) can help to reduce Operational Energy (OE) in a house. In addition, a house should also incorporate Passive Architecture (PA) design strategies which in the hot and humid tropical climate, mean avoiding direct heat gain, encouraging natural cross ventilation and optimising the abundant daylight. Nevertheless, reducing OE must also mean economic gain to households to encourage their participation. Common economic gauges such as Return on Investment, Payback Period, Cost Benefit Analysis, Life Cycle Assessment and Life Cycle Cost are not suitable to validate OE options in households. These economic gauges approach economic assessment as an end-result on the cost side of the product and may result for good intention to be shelved, primarily because EE equipment and RE have high capital cost compared with the alternatives. On the other hand, reducing OE in houses is actually a continual progression from the status quo and there is always a marginal gain in doing so. The challenge is to know how much is the marginal benefit against the marginal cost of investing in EE and RE. In Economics, the ratio of Marginal Cost (MC) and Marginal Benefits (MB) measure additional benefits of every additional costs of investment at a specific level of production and consumption; and Economists suggests that effective gain and loss should be compared to the status quo, i.e., Relative Position (RP). The Economics theories of MC, MB and RP are being adapted to measure the progression of reducing OE. The living/dining area in two types of houses: with and without PA design strategies are simulated to use conventional incandescent light bulbs and CFL as well as solar PV in lieu of the mains electricity supply. The power requirement for artificial lighting in every case is translated into monetary value and the ratio of MB against MC for each case shows

  17. Societal value of generic medicines beyond cost-saving through reduced prices.

    Science.gov (United States)

    Dylst, Pieter; Vulto, Arnold; Simoens, Steven

    2015-01-01

    This paper aims to provide an overview of the added societal value of generic medicines beyond their cost-saving potential through reduced prices. In addition, an observational case study will document the impact of generic entry on access to pharmacotherapy in The Netherlands and an illustrative exercise was carried out to highlight the budget impact of generic entry. A narrative literature review was carried out to explore the impact of generic medicines on access to pharmacotherapy, innovation and medication adherence. Data from the Medicines and Medical Devices Information Project database in The Netherlands were used for the case study in which the impact of generic medicine entrance on the budget and the number of users was calculated as an illustrative exercise. Generic medicines have an additional societal value beyond their cost-saving potential through reduced prices. Generic medicines increase access to pharmacotherapy, provide a stimulus for innovation by both originator companies and generic companies and, under the right circumstances, have a positive impact on medication adherence. Generic medicines offer more to society than just their cost-saving potential through reduced prices. As such, governments must not focus only on the prices of generic medicines as this will threaten their long-term sustainability. Governments must therefore act appropriately and implement a coherent set of policies to increase the use of generic medicines.

  18. Application of Target Costing method in the Hospitality Industry

    Directory of Open Access Journals (Sweden)

    Andor Pajrok

    2014-12-01

    Full Text Available Traditional approaches to managing costs are based on the costs that are the result of existing capabilities and resources in the company. Adding to these costs a specified margin or profit, leads to the sales price. If the market is not ready to accept such a selling price, managers need to find opportunities for rationalization and cost reduction. Target cost management begins the process of managing the sales price and the planned profit that the market can accept, and only then is it possible to determine the cost of the product. In the planning phase of the product and the manufacturing process the approach is to finding a method to lower costs and to reduce them as much as possible. The aim this of study is to investigate the application of target (strategy cost accounting methods in the Hospitality Industry.

  19. 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.

  20. 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

  1. The Impact of Supply Chain Cost on the Price of the Final Product

    Directory of Open Access Journals (Sweden)

    Indrė Lapinskaitė

    2014-06-01

    Full Text Available Nowadays, as consumption and production are growing enormously fast, companies are seeking for costs reduction aimed at ensuring competitiveness. In manufacturing companies, supply chain expenses play a colossal role in the cost of the final product. This paper focuses on the main processes in the logistics chain and their components. The authors analyse the relationship between the sup- ply chain expenses and the price of the final product, the classification of logistics chain costs and their minimization as an assumption for the competitiveness of the final price.

  2. Price comparison of high-cost originator medicines in European countries.

    Science.gov (United States)

    Vogler, Sabine; Zimmermann, Nina; Babar, Zaheer-Ud-Din

    2017-04-01

    In recent years, high-cost medicines have increasingly been challenging the public health budget in all countries including high-income economies. In this context, this study aims to survey, analyze and compare prices of medicines that likely contribute to high expenditure for the public payers in high-income countries. We chose the following 16 European countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, the Netherlands, Portugal, Sweden, Slovakia, Spain and United Kingdom. The ex-factory price data of 30 medicines in these countries were collected in national databases accessible through the Pharmaceutical Price Information (PPI) service of Gesundheit Österreich GmbH (Austrian Public Health Institute). The ex-factory prices (median) per unit (e.g. per tablet, vial) ranged from 10.67 cent (levodopa + decarboxylase inhibitor) to 17,000 euro (ipilimumab). A total of 53% of the medicines surveyed had a unit ex-factory price (median) above 200 Euro. For two thirds of the medicines, price differences between the highest-priced country and lowest-priced country ranged between 25 and 100%; the remaining medicines, mainly low-priced medicines, had higher price differential, up to 251%. Medicines with unit prices of a few euros or less were medicines for the treatment of diseases in the nervous system (anti-depressants, medicines to treat Parkinson and for the management of neuropathic pain), of obstructive airway diseases and cardio-vascular medicines (lipid modifying agents). High-priced medicines were particularly cancer medicines. Medicine prices of Greece, Hungary, Slovakia and UK were frequently at the lower end, German and Swedish, as well as Danish and Irish prices at the upper end. For high-priced medicines, actual paid prices are likely to be lower due to confidential discounts and similar funding arrangements between industry and public payers. Pricing authorities refer to the higher undiscounted prices when they use

  3. 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)

  4. FARM LABOR COSTS AND FOOD PRICES, 1964-65.

    Science.gov (United States)

    1966

    TO MEASURE THE IMPACT OF THE DECLINE OF FOREIGN AGRICULTURAL WORKER EMPLOYMENT ON FARM-LABOR COSTS, FOOD PRICES, AND RETURN TO THE FARMER, AN ANALYSIS WAS MADE OF THE 1964-65 CHANGES IN THESE FACTORS FOR SELECTED CALIFORNIA CROPS. TOMATOES, LETTUCE, STRAWBERRIES, CANTALOUPES, CELERY, LEMONS, AND ASPARAGUS, WHICH ACCOUNTED FOR 71 PERCENT OF THE…

  5. Lookback Option Pricing with Fixed Proportional Transaction Costs under Fractional Brownian Motion.

    Science.gov (United States)

    Sun, Jiao-Jiao; Zhou, Shengwu; Zhang, Yan; Han, Miao; Wang, Fei

    2014-01-01

    The pricing problem of lookback option with a fixed proportion of transaction costs is investigated when the underlying asset price follows a fractional Brownian motion process. Firstly, using Leland's hedging method a partial differential equation satisfied by the value of the lookback option is derived. Then we obtain its numerical solution by constructing a Crank-Nicolson format. Finally, the effectiveness of the proposed form is verified through a numerical example. Meanwhile, the impact of transaction cost rate and volatility on lookback option value is discussed.

  6. Monopolistic pricing power for transgenic crops when technology adopters face irreversible benefits and costs

    NARCIS (Netherlands)

    Weaver, R.D.; Wesseler, J.H.H.

    2004-01-01

    Pricing of biotechnology innovation under a patent grant is reconsidered in a model with uncertain returns and irreversible costs and benefits. Past results oil restricted monopoly pricing in the presence of competing technologies showed that pricing power is reduced. The timing of adoption of an

  7. An assessment of household electricity load curves and corresponding CO2 marginal abatement cost curves for Gujarat state, India

    International Nuclear Information System (INIS)

    Garg, Amit; Shukla, P.R.; Maheshwari, Jyoti; Upadhyay, Jigeesha

    2014-01-01

    Gujarat, a large industrialized state in India, consumed 67 TWh of electricity in 2009–10, besides experiencing a 4.5% demand–supply short-fall. Residential sector accounted for 15% of the total electricity consumption. We conducted load research survey across 21 cities and towns of the state to estimate residential electricity load curves, share of appliances by type and usage patterns for all types of household appliances at utility, geographic, appliance, income and end-use levels. The results indicate that a large scope exists for penetration of energy efficient devices in residential sector. Marginal Abatement Cost (MAC) curves for electricity and CO 2 were generated to analyze relative attractiveness of energy efficient appliance options. Results indicate that up to 7.9 TWh of electricity can be saved per year with 6.7 Mt-CO 2 emissions mitigation at negative or very low CO 2 prices of US$ 10/t-CO 2 . Despite such options existing, their penetration is not realized due to myriad barriers such as financial, institutional or awareness and therefore cannot be taken as baseline options for CO 2 emission mitigation regimes. - Highlights: • Residential sector provides focused mitigation opportunities. • Energy efficient space cooling is the main technology transition required. • Almost 26% residential load could be reduced by DSM measures. • Myriad barriers limit penetration of negative marginal cost efficient options

  8. 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.

  9. Optimal pricing policies for services with consideration of facility maintenance costs

    Science.gov (United States)

    Yeh, Ruey Huei; Lin, Yi-Fang

    2012-06-01

    For survival and success, pricing is an essential issue for service firms. This article deals with the pricing strategies for services with substantial facility maintenance costs. For this purpose, a mathematical framework that incorporates service demand and facility deterioration is proposed to address the problem. The facility and customers constitute a service system driven by Poisson arrivals and exponential service times. A service demand with increasing price elasticity and a facility lifetime with strictly increasing failure rate are also adopted in modelling. By examining the bidirectional relationship between customer demand and facility deterioration in the profit model, the pricing policies of the service are investigated. Then analytical conditions of customer demand and facility lifetime are derived to achieve a unique optimal pricing policy. The comparative statics properties of the optimal policy are also explored. Finally, numerical examples are presented to illustrate the effects of parameter variations on the optimal pricing policy.

  10. 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

  11. 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)

  12. 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

  13. Marginal abatement cost curves for NOx that account for renewable electricity, energy efficiency, and fuel switching

    Science.gov (United States)

    A marginal abatement cost curve (MACC) traces out the relationship between the quantity of pollution abated and the marginal cost of abating each additional unit. In the context of air quality management, MACCs typically are developed by sorting end-of-pipe controls by their resp...

  14. 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

  15. 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)

  16. Price-transparency and cost accounting: challenges for health care organizations in the consumer-driven era.

    Science.gov (United States)

    Hilsenrath, Peter; Eakin, Cynthia; Fischer, Katrina

    2015-01-01

    Health care reform is directed toward improving access and quality while containing costs. An essential part of this is improvement of pricing models to more accurately reflect the costs of providing care. Transparent prices that reflect costs are necessary to signal information to consumers and producers. This information is central in a consumer-driven marketplace. The rapid increase in high deductible insurance and other forms of cost sharing incentivizes the search for price information. The organizational ability to measure costs across a cycle of care is an integral component of creating value, and will play a greater role as reimbursements transition to episode-based care, value-based purchasing, and accountable care organization models. This article discusses use of activity-based costing (ABC) to better measure the cost of health care. It describes examples of ABC in health care organizations and discusses impediments to adoption in the United States including cultural and institutional barriers. © The Author(s) 2015.

  17. 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

  18. MANUFACTURING PRICES, PRODUCTIVITY, AND LABOR COSTS IN 5 ECONOMIES

    NARCIS (Netherlands)

    VANARK, B

    The United States continues to surge ahead of other major industrial economies in terms of lower prices, higher levels of labor productivity, and better unit labor cost performance; while the depreciation of the dollar plays an important role, real productivity gains are important as well.

  19. 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.

  20. 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.

  1. Fuel prices, emission standards, and generation costs for coal vs natural gas power plants.

    Science.gov (United States)

    Pratson, Lincoln F; Haerer, Drew; Patiño-Echeverri, Dalia

    2013-05-07

    Low natural gas prices and stricter, federal emission regulations are promoting a shift away from coal power plants and toward natural gas plants as the lowest-cost means of generating electricity in the United States. By estimating the cost of electricity generation (COE) for 304 coal and 358 natural gas plants, we show that the economic viability of 9% of current coal capacity is challenged by low natural gas prices, while another 56% would be challenged by the stricter emission regulations. Under the current regulations, coal plants would again become the dominant least-cost generation option should the ratio of average natural gas to coal prices (NG2CP) rise to 1.8 (it was 1.42 in February 2012). If the more stringent emission standards are enforced, however, natural gas plants would remain cost competitive with a majority of coal plants for NG2CPs up to 4.3.

  2. A Partial Backlogging Inventory Model for Deteriorating Items with Fluctuating Selling Price and Purchasing Cost

    Directory of Open Access Journals (Sweden)

    Hui-Ling Yang

    2012-01-01

    Full Text Available In today’s competitive markets, selling price and purchasing cost are usually fluctuating with economic conditions. Both selling price and purchasing cost are vital to the profitability of a firm. Therefore, in this paper, I extend the inventory model introduced by Teng and Yang (2004 to allow for not only the selling price but also the purchasing cost to change from one replenishment cycle to another during a finite time horizon. The objective is to find the optimal replenishment schedule and pricing policy to obtain the profit as maximum as possible. The conditions that lead to a maximizing solution guarantee that the existence, uniqueness, and global optimality are proposed. An efficient solution procedure and some theoretical results are presented. Finally, numerical examples for illustration and sensitivity analysis for managerial decision making are also performed.

  3. Residential, Commercial, and Utility-Scale Photovoltaic (PV) System Prices in the United States: Current Drivers and Cost-Reduction Opportunities

    Energy Technology Data Exchange (ETDEWEB)

    Goodrich, A.; James, T.; Woodhouse, M.

    2012-02-01

    The price of photovoltaic (PV) systems in the United States (i.e., the cost to the system owner) has dropped precipitously in recent years, led by substantial reductions in global PV module prices. However, system cost reductions are not necessarily realized or realized in a timely manner by many customers. Many reasons exist for the apparent disconnects between installation costs, component prices, and system prices; most notable is the impact of fair market value considerations on system prices. To guide policy and research and development strategy decisions, it is necessary to develop a granular perspective on the factors that underlie PV system prices and to eliminate subjective pricing parameters. This report's analysis of the overnight capital costs (cash purchase) paid for PV systems attempts to establish an objective methodology that most closely approximates the book value of PV system assets.

  4. 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.

  5. Ordering Cost Reduction in Inventory Model with Defective Items and Backorder Price Discount

    Directory of Open Access Journals (Sweden)

    Karuppuchamy Annadurai

    2014-01-01

    Full Text Available In the real market, as unsatisfied demands occur, the longer the length of lead time is, the smaller the proportion of backorder would be. In order to make up for the inconvenience and even the losses of royal and patient customers, the supplier may offer a backorder price discount to secure orders during the shortage period. Also, ordering policies determined by conventional inventory models may be inappropriate for the situation in which an arrival lot contains some defective items. To compensate for the inconvenience of backordering and to secure orders, the supplier may offer a price discount on the stockout item. The purpose of this study is to explore a coordinated inventory model including defective arrivals by allowing the backorder price discount and ordering cost as decision variables. There are two inventory models proposed in this paper, one with normally distributed demand and another with distribution free demand. A computer code using the software Matlab 7.0 is developed to find the optimal solution and present numerical examples to illustrate the models. The results in the numerical examples indicate that the savings of the total cost are realized through ordering cost reduction and backorder price discount.

  6. Reduction potential, shadow prices, and pollution costs of agricultural pollutants in China.

    Science.gov (United States)

    Tang, Kai; Gong, Chengzhu; Wang, Dong

    2016-01-15

    This paper analyses the reduction potential, shadow prices, and pollution costs of agricultural pollutants in China based on provincial panel data for 2001-2010. Using a parameterized quadratic form for the directional output distance function, we find that if agricultural sectors in all provinces were to produce on the production frontier, China could potentially reduce agricultural emissions of chemical oxygen demand (COD), total nitrogen (TN), and total phosphorus (TP) by 16.0%, 16.2%, and 20.4%, respectively. Additionally, our results show that the shadow price of TN increased rapidly and continuously, while that of COD and TP fluctuated for the whole period. For the whole country, the average shadow price of COD, TN, and TP are 8266 Yuan/tonne, 25,560 Yuan/tonne, and 10,160 Yuan/tonne, respectively. The regional shadow prices of agricultural pollutants are unbalanced. Furthermore, we show that the pollution costs from emissions of COD, TN, and TP are 6.09% of the annual gross output value of the agricultural sector and are highest in the Western and lowest in the Eastern provinces. Our estimates suggest that there is scope for further pollution abatement and simultaneous output expansion for China's agriculture if farmers promote greater efficiency in their production process. Policymakers are required to dynamically adjust the pollution tax rates and ascertain the initial permit price in an emission trading system. Policymakers should also consider the different pollution costs for each province when making the reduction allocations within the agricultural sector. Copyright © 2015 Elsevier B.V. All rights reserved.

  7. GIS-based approach for defining bioenergy facilities location: A case study in Northern Spain based on marginal delivery costs and resources competition between facilities

    Energy Technology Data Exchange (ETDEWEB)

    Panichelli, Luis; Gnansounou, Edgard [Laboratory of Energy Systems, Swiss Federal Institute of Technology, LASEN-ICARE-ENAC, Station 18, EPFL, CH-1015 Lausanne (Switzerland)

    2008-04-15

    This paper presents a GIS-based decision support system for selecting least-cost bioenergy locations when there is a significant variability in biomass farmgate price and when more than one bioenergy plant with a fixed capacity has to be placed in the region. The methodology tackles the resources competition problem between energy facilities through a location-allocation model based on least-cost biomass quantities. Whole system least delivery cost including intermediate bioenergy products is estimated. The methodology is based on a case study where forest wood residues (FWR) from final cuttings (FCs) are used to produce torrefied wood (TW) in two torrefaction plants (TUs) that supply a gasification unit (GU) in order to produce electricity. The provinces of Navarra, Bizkaia, Gipuzkoa, Alava, La Rioja, Cantabria and Burgos are assessed in order to find the best locations for settling down the TUs and the GU according to biomass availability, FWR and TW marginal delivery costs. (author)

  8. Regional differences in electricity distribution costs and their consequences for yardstick regulation of access prices

    International Nuclear Information System (INIS)

    Filippini, M.; Wild, J.

    2001-01-01

    In this paper we estimate an average-cost function for a panel of 59 Swiss local and regional electricity distribution utilities as a basis for yardstick regulation of the distribution-network access prices. Shleifer (1985) proposed yardstick competition in terms of price to regulate local monopolies producing a homogeneous good. The regulated price for the individual firms depends on the average costs of identical firms. The yardstick competition concept can also be applied to firms that produce heterogeneous goods if these goods differ only in observable characteristics. To correct the yardstick for heterogeneity the regulator can use a multivariate estimation of an average-cost function. In the case of electricity distribution, the heterogeneity of output consists mainly of different characteristics of the distribution service areas. In this paper we follow Shleifer's suggestion to estimate a multivariate average-cost function that can be employed by the regulatory commission to benchmark network access prices at the distribution level. Several exogenous variables measuring the heterogeneity of the service areas were included in the cost model specification. We find that the regional differences of the service areas - e.g. area shares of forests, agricultural areas or unproductive land and population density - significantly influence electricity distribution costs

  9. On the assessment of marginal life saving costs for risk acceptance criteria

    DEFF Research Database (Denmark)

    Fischer, Katharina; Virguez, Edgar; Sánchez-Silva, Mauricio

    2013-01-01

    : The definition of the marginal life saving costs, the discount rate used for comparing costs and benefits that accrue at different points in time and the time horizon over which future consequences of the decision are taken into account. In the present paper these issues are discussed based on a clear...

  10. Low cost energy in Canada: The view from downstream

    International Nuclear Information System (INIS)

    Irving, K.

    1993-01-01

    The key cost determinants of energy in Canada are analyzed and recommendations are made to ensure the competitiveness of Canadian energy costs and energy-consuming industries in the North American and world markets. Oil supplies 45% of world energy and has a key role in determining prices of all other energy forms since it serves as an incremental source of energy: its consumption changes according to economic growth, changes in weather patterns, and other factors. North America currently accounts for about a third of world oil consumption. North American oil demand is expected to remain flat over the next few decades. As Canada only produces ca 3% of world oil supply, it cannot determine oil prices. However, with an efficient downstream industry, Canada can influence the end-user price of energy. The cost structure of refined products in Canada is analyzed. The cost of raw materials is the single biggest determinant of the final product cost, followed by taxes, operating costs, and profit margin. For gasoline in Ontario, taxes account for half the retail cost, crude oil prices ca 30%, and refining costs ca 4%. Refining costs comprise about two thirds labor costs and one third energy costs. Refiner margins have not exceeded 2 cents/l since 1981, creating reluctance to invest in the refining sector. By 1994, some 200,000 bbl/d of refining capacity is expected to be shut down in Canada. Compared to refineries in the USA, Canadian refineries are smaller and have a much lower capacity to upgrade residual fuel oil to light products. Future challenges to the industry include a projected need for $5 billion in investment, largely to fund new environmental initiatives. Such an investment cannot be met through current industry profits. 12 figs., 3 tabs

  11. 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)

  12. 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...

  13. On the Trade-off Between Real-time Pricing and the Social Acceptability Costs of Demand Response

    DEFF Research Database (Denmark)

    da Silva, Hendrigo Batista; Santiago, Leonardo

    2018-01-01

    on the social acceptability costs of implementing demand response programs, and we discuss the key features of implementing a real-time price to energy. Although the literature acknowledges the existence of a social acceptability cost, it does not propose an explicit approach to dealing with this issue. A model...... for investigating the implications of the social acceptability cost is thus introduced and through it, we discuss thoroughly the joint impact of the elasticity and externality parameters on the tariff design of a demand response program. We explore how the increases in elasticity and in externality effects...... influence price changes in such programs and how the social acceptability cost could be reduced as a function of pricing policies. We conclude by discussing the policy design mechanisms in line with demand elasticity and their role in decreasing price variations to cope with the minimum volatility principle...

  14. 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)

  15. Fundamental Drivers of the Cost and Price of Operating Reserves

    Energy Technology Data Exchange (ETDEWEB)

    Hummon, Marissa [National Renewable Energy Lab. (NREL), Golden, CO (United States); Denholm, Paul [National Renewable Energy Lab. (NREL), Golden, CO (United States); Jorgenson, Jennie [National Renewable Energy Lab. (NREL), Golden, CO (United States); Palchak, David [National Renewable Energy Lab. (NREL), Golden, CO (United States); Kirby, Brendan [Kirby Consultant; Ma, Ookie [U.S. Department of Energy, Washington, DC (United States)

    2013-07-01

    Operating reserves impose a cost on the electric power system by forcing system operators to keep partially loaded spinning generators available for responding to system contingencies variable demand. In many regions of the United States, thermal power plants provide a large fraction of the operating reserve requirement. Alternative sources of operating reserves, such as demand response and energy storage, may provide more efficient sources of these reserves. However, to estimate the potential value of these services, the cost of reserve services under various grid conditions must first be established. This analysis used a commercial grid simulation tool to evaluate the cost and price of several operating reserve services, including spinning contingency reserves and upward regulation reserves. These reserve products were evaluated in a utility system in the western United States, considering different system flexibilities, renewable energy penetration, and other sensitivities. The analysis demonstrates that the price of operating reserves depend highly on many assumptions regarding the operational flexibility of the generation fleet, including ramp rates and the fraction of fleet available to provide reserves.

  16. 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.)

  17. Prices, Costs, and Affordability of New Medicines for Hepatitis C in 30 Countries: An Economic Analysis.

    Science.gov (United States)

    Iyengar, Swathi; Tay-Teo, Kiu; Vogler, Sabine; Beyer, Peter; Wiktor, Stefan; de Joncheere, Kees; Hill, Suzanne

    2016-05-01

    New hepatitis C virus (HCV) medicines have markedly improved treatment efficacy and regimen tolerability. However, their high prices have limited access, prompting wide debate about fair and affordable prices. This study systematically compared the price and affordability of sofosbuvir and ledipasvir/sofosbuvir across 30 countries to assess affordability to health systems and patients. Published 2015 ex-factory prices for a 12-wk course of treatment were provided by the Pharma Price Information (PPI) service of the Austrian public health institute Gesundheit Österreich GmbH or were obtained from national government or drug reimbursement authorities and recent press releases, where necessary. Prices in Organisation for Economic Co-operation and Development (OECD) member countries and select low- and middle-income countries were converted to US dollars using period average exchange rates and were adjusted for purchasing power parity (PPP). We analysed prices compared to national economic performance and estimated market size and the cost of these drugs in terms of countries' annual total pharmaceutical expenditure (TPE) and in terms of the duration of time an individual would need to work to pay for treatment out of pocket. Patient affordability was calculated using 2014 OECD average annual wages, supplemented with International Labour Organization median wage data where necessary. All data were compiled between 17 July 2015 and 25 January 2016. For the base case analysis, we assumed a 23% rebate/discount on the published price in all countries, except for countries with special pricing arrangements or generic licensing agreements. The median nominal ex-factory price of a 12-wk course of sofosbuvir across 26 OECD countries was US$42,017, ranging from US$37,729 in Japan to US$64,680 in the US. Central and Eastern European countries had higher PPP-adjusted prices than other countries: prices of sofosbuvir in Poland and Turkey (PPP$101,063 and PPP$70,331) and of

  18. Prices, Costs, and Affordability of New Medicines for Hepatitis C in 30 Countries: An Economic Analysis.

    Directory of Open Access Journals (Sweden)

    Swathi Iyengar

    2016-05-01

    Full Text Available New hepatitis C virus (HCV medicines have markedly improved treatment efficacy and regimen tolerability. However, their high prices have limited access, prompting wide debate about fair and affordable prices. This study systematically compared the price and affordability of sofosbuvir and ledipasvir/sofosbuvir across 30 countries to assess affordability to health systems and patients.Published 2015 ex-factory prices for a 12-wk course of treatment were provided by the Pharma Price Information (PPI service of the Austrian public health institute Gesundheit Österreich GmbH or were obtained from national government or drug reimbursement authorities and recent press releases, where necessary. Prices in Organisation for Economic Co-operation and Development (OECD member countries and select low- and middle-income countries were converted to US dollars using period average exchange rates and were adjusted for purchasing power parity (PPP. We analysed prices compared to national economic performance and estimated market size and the cost of these drugs in terms of countries' annual total pharmaceutical expenditure (TPE and in terms of the duration of time an individual would need to work to pay for treatment out of pocket. Patient affordability was calculated using 2014 OECD average annual wages, supplemented with International Labour Organization median wage data where necessary. All data were compiled between 17 July 2015 and 25 January 2016. For the base case analysis, we assumed a 23% rebate/discount on the published price in all countries, except for countries with special pricing arrangements or generic licensing agreements. The median nominal ex-factory price of a 12-wk course of sofosbuvir across 26 OECD countries was US$42,017, ranging from US$37,729 in Japan to US$64,680 in the US. Central and Eastern European countries had higher PPP-adjusted prices than other countries: prices of sofosbuvir in Poland and Turkey (PPP$101,063 and PPP$70

  19. Prices, Costs, and Affordability of New Medicines for Hepatitis C in 30 Countries: An Economic Analysis

    Science.gov (United States)

    Tay-Teo, Kiu; Vogler, Sabine; Beyer, Peter; Wiktor, Stefan; de Joncheere, Kees; Hill, Suzanne

    2016-01-01

    Introduction New hepatitis C virus (HCV) medicines have markedly improved treatment efficacy and regimen tolerability. However, their high prices have limited access, prompting wide debate about fair and affordable prices. This study systematically compared the price and affordability of sofosbuvir and ledipasvir/sofosbuvir across 30 countries to assess affordability to health systems and patients. Methods and Findings Published 2015 ex-factory prices for a 12-wk course of treatment were provided by the Pharma Price Information (PPI) service of the Austrian public health institute Gesundheit Österreich GmbH or were obtained from national government or drug reimbursement authorities and recent press releases, where necessary. Prices in Organisation for Economic Co-operation and Development (OECD) member countries and select low- and middle-income countries were converted to US dollars using period average exchange rates and were adjusted for purchasing power parity (PPP). We analysed prices compared to national economic performance and estimated market size and the cost of these drugs in terms of countries’ annual total pharmaceutical expenditure (TPE) and in terms of the duration of time an individual would need to work to pay for treatment out of pocket. Patient affordability was calculated using 2014 OECD average annual wages, supplemented with International Labour Organization median wage data where necessary. All data were compiled between 17 July 2015 and 25 January 2016. For the base case analysis, we assumed a 23% rebate/discount on the published price in all countries, except for countries with special pricing arrangements or generic licensing agreements. The median nominal ex-factory price of a 12-wk course of sofosbuvir across 26 OECD countries was US$42,017, ranging from US$37,729 in Japan to US$64,680 in the US. Central and Eastern European countries had higher PPP-adjusted prices than other countries: prices of sofosbuvir in Poland and Turkey (PPP

  20. 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

  1. 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

  2. Free Cash-Flow, Issuance Costs and Stock Price Volatility

    OpenAIRE

    Décamps, Jean-Paul; Mariotti, Thomas; Rochet, Jean-Charles; Villeneuve, Stéphane

    2008-01-01

    We study the issuance and payout policies that maximize the value of a firm facing both agency costs of free cash-flow and external financing costs. We find that the firm optimally issues equity. Equity distributes no dividends until a target cash level is reached, while new equity is issued when the firm runs out of cash. We characterize the process modelling the number of outstanding shares and the dynamics of the stock prices. In line with the leverage effect identified by Black (1976), we...

  3. 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)

  4. 48 CFR 52.214-28 - Subcontractor Certified Cost or Pricing Data-Modifications-Sealed Bidding.

    Science.gov (United States)

    2010-10-01

    ... cost or pricing data at FAR 15.403-4(a)(1), on the date of agreement on price or the date of award... nature and amount of any contingencies included in the price), unless an exception under FAR 15.403-1(b... prescribed in subsection 15.406-2 of the Federal Acquisition Regulation that, to the best of its knowledge...

  5. Studi Banding Penyusunan Laporan Keuangan Dengan Metode Historical Cost Accounting Dan General Price Level Accounting Pada Masa Inflasi

    OpenAIRE

    Kodrat, David Sukardi

    2006-01-01

    Generally, Financial Statements are based on Historical Cost Accounting (HCA) that assumes that prices are stable. Actually, there are several methods on accounting for the effect of changing prices, such as Current Cost Accounting (Replacement Cost Accounting) and Constant Dollar Accounting or General Price Level Accounting (GPLA)). GPLA will do restatement the components of financial statement to be a rupiah on a similar level of purchasing power, but without changes in accounting principle...

  6. STUDI BANDING PENYUSUNAN LAPORAN KEUANGAN DENGAN METODE HISTORICAL COST ACCOUNTING DAN GENERAL PRICE LEVEL ACCOUNTING PADA MASA INFLASI

    OpenAIRE

    David Sukardi Kodrat

    2006-01-01

    Generally, Financial Statements are based on Historical Cost Accounting (HCA) that assumes that prices are stable. Actually, there are several methods on accounting for the effect of changing prices, such as Current Cost Accounting (Replacement Cost Accounting) and Constant Dollar Accounting or General Price Level Accounting (GPLA)). GPLA will do restatement the components of financial statement to be a rupiah on a similar level of purchasing power, but without changes in accounting principle...

  7. Competitive pricing and the challenge of cost control in medicare.

    Science.gov (United States)

    Coulam, Robert F; Feldman, Roger D; Dowd, Bryan E

    2011-08-01

    The Medicare program faces a serious challenge: it must find ways to control costs but must do so through a system of congressional oversight that necessarily limits its choices. We look at one approach to prudent purchasing - competitive pricing - that Medicare has attempted many times and in various ways since the beginning of the program, and in all but one case unsuccessfully due to the politics of provider opposition working through Congress and the courts. We look at some related efforts to change Medicare pricing to explore when the program has been successful in making dramatic changes in how it pays for health care. A set of recommendations emerges for ways to respond to the impediments of law and politics that have obstructed change to more efficient payment methods. Except in unusual cases, competitive pricing threatens too many stakeholders in too many ways for key political actors to support it. But an unusual case may arise in the coming Medicare fiscal crisis, a crisis related in part to the prices Medicare pays. At that point, competitive pricing may look less like a problem and more like a solution coming at a time when the system badly needs one.

  8. Accounting for the drug life cycle and future drug prices in cost-effectiveness analysis.

    Science.gov (United States)

    Hoyle, Martin

    2011-01-01

    Economic evaluations of health technologies typically assume constant real drug prices and model only the cohort of patients currently eligible for treatment. It has recently been suggested that, in the UK, we should assume that real drug prices decrease at 4% per annum and, in New Zealand, that real drug prices decrease at 2% per annum and at patent expiry the drug price falls. It has also recently been suggested that we should model multiple future incident cohorts. In this article, the cost effectiveness of drugs is modelled based on these ideas. Algebraic expressions are developed to capture all costs and benefits over the entire life cycle of a new drug. The lifetime of a new drug in the UK, a key model parameter, is estimated as 33 years, based on the historical lifetime of drugs in England over the last 27 years. Under the proposed methodology, cost effectiveness is calculated for seven new drugs recently appraised in the UK. Cost effectiveness as assessed in the future is also estimated. Whilst the article is framed in mathematics, the findings and recommendations are also explained in non-mathematical language. The 'life-cycle correction factor' is introduced, which is used to convert estimates of cost effectiveness as traditionally calculated into estimates under the proposed methodology. Under the proposed methodology, all seven drugs appear far more cost effective in the UK than published. For example, the incremental cost-effectiveness ratio decreases by 46%, from £61, 900 to £33, 500 per QALY, for cinacalcet versus best supportive care for end-stage renal disease, and by 45%, from £31,100 to £17,000 per QALY, for imatinib versus interferon-α for chronic myeloid leukaemia. Assuming real drug prices decrease over time, the chance that a drug is publicly funded increases over time, and is greater when modelling multiple cohorts than with a single cohort. Using the methodology (compared with traditional methodology) all drugs in the UK and New

  9. Endogenous Transport Costs in International Trade

    OpenAIRE

    Joern Kleinert; Julia Spies

    2011-01-01

    In this paper we claim that distance alone is a poor proxy for international transport costs in empirical studies. We model a manufacturing and a transport sector and let the level of manufacturing exports determine the demand for transport services. Above a particular trade level, transport service suppliers find it profit-maximizing to invest in an advanced transport technology, which lowers their marginal costs and as a consequence, equilibrium transport prices. Transport costs thus vary w...

  10. Use of synthetic series of monthly flows in calculating the marginal cost of energy of the national interconnected power system of Peru

    International Nuclear Information System (INIS)

    Sarango J, D.; Velasquez B, T.

    2009-01-01

    In this research it was determined the feasibility of using synthetic series of monthly average flow for the determination of the average marginal cost of energy in the National Interconnected Electric System of Peru, SEIN, taking as a case study of implementing bar tariff setting in 2004, where it was used the PERSEO model for planning, simulation and optimization of the hydrothermal system in Peru. The model is currently used by the Deputy Manager of tariff regulation (GART) of the Agency for Supervision of Investment in Energy and Mining - OSINERGMIN. The model use as hydrological information the average monthly flow series of tributaries to the historical attractions of the 23 river basins of the SEIN, one of the main is the basin of the Junin Lake, whose water is used by the Mantaro and Restitution hydroelectric, generating almost 20% of the power of our country. With the HEC-4 program, developed by the Hydrological Engineering Center of the USA, from the time series of monthly historical flows tributary to the Junin Lake, 50 series were generated synthetic monthly flow, determined from them a dry series, a average series and a wet series, information that was used in the PERSEO model to calculate the average marginal cost of energy of SEIN for each case. The results obtained from the average marginal cost of energy with the use of synthetic series of monthly flows, for the dry case, average case and wet case, with the PERSEO model, compared to the historical event, are lower in order of 1.14, 1.55 and 0.87 US $/MWh, the results will determine a decline in energy prices for end users, such as the domestic, commercial, industrial and mining users. (author).

  11. IMPLEMENTATION OF ACTIVITY BASED ANALYSIS METHOD COSTING SYSTEM IN PRICING COST OF ROOMS IN HOTEL DYNASTY MAKASSAR

    Directory of Open Access Journals (Sweden)

    Muh Nur Hatta

    2017-06-01

    Full Text Available The purpose of this study is to fulfill one of the final project now where Thesis research was held in April to June, 2016. This study aims to know the differences in the calculation of the cost of the room by using a conventional system using activity-based costing (ABC system. method analysis is using descriptive method of analysis of the cost of the hotel this time, set the conventional method and then comparing the cost of a hotel room based activity based result costing. study showed that of calculating the cost of a hotel room by using activity based costing, when compared with the cost of hotel rooms used by the activity based costing Dynasty then give the results in standard rooms, deluxe, suites and family give results the calculation of which is smaller than the cost of the rooms which have been determined by the hotel management. That is, with the difference in price for a Standard room IDR. 58024.84. For a Deluxe room IDR. 175,411.58. For room Suite IDR. 99. 034,88. Family rooms and for IDR. 100,045.60. While in the room Executive Suite / Pent House Activity Based Costing calculation result is greater than the cost of the rooms which have been determined by the hotel management. That is, with the difference amounting to IDR. 368,096.17. The difference in price is due to the method of Activity Based Costing,The overhead on each product is charged to a lot of cost driver. Thus, in the Activity Based Costing method is able to allocate activity costs to each room is right by the consumption of each activity.

  12. 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

  13. Modelling the transition from cost-based to bid-based pricing in a deregulated electricity-market

    International Nuclear Information System (INIS)

    Druce, Donald J.

    2007-01-01

    Alberta is a province in western Canada with a deregulated electricity-market. Market clearing prices for most hours reflect the cost of either coal-fired or gas-fired thermal generation. Whenever there is a chronic shortage of generation or even a temporary one due to an outage, prices can be bid much higher than fuel costs would suggest. The province of British Columbia borders Alberta to the west and its electric utility, BC Hydro, has a history of trade with the utilities in Alberta. BC Hydro has predominantly hydroelectric resources and large storage reservoirs. Prior to Alberta's deregulation in 1996, BC Hydro was able to enter into mutually beneficial load-factoring contracts with the Alberta utilities. Now, as long as the transmission is available, BC Hydro can buy low priced off-peak coal-fired energy and sell into the high priced periods without having to share the benefits. BC Hydro uses a combination of econometric and Monte Carlo modelling to simulate hourly price-duration curves for Alberta that capture both cost-based and bid-based characteristics. This approach provides a good fit with the stochastic dynamic programming model that BC Hydro has developed for its mid-term hydro scheduling

  14. 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

  15. Pricing European option with transaction costs under the fractional long memory stochastic volatility model

    Science.gov (United States)

    Wang, Xiao-Tian; Wu, Min; Zhou, Ze-Min; Jing, Wei-Shu

    2012-02-01

    This paper deals with the problem of discrete time option pricing using the fractional long memory stochastic volatility model with transaction costs. Through the 'anchoring and adjustment' argument in a discrete time setting, a European call option pricing formula is obtained.

  16. Costing and pricing electric power reserve services. Final report

    International Nuclear Information System (INIS)

    Kirsch, L.D.; Rajaraman, R.; Clark, C.

    1997-12-01

    In the competitive electric power markets of the imminent future, reserves will be the second largest generation service in terms of their revenues and profits. Because reserves will be more widely traded than at present, they will be provided by the cheapest available sources regardless of the ownership of those sources. Price will determine the willingness of generators and consumers to provide reserve services; and it may also determine the willingness of reserve users to purchase reserve services. This report presents a methodology by which generation firms and merchant firms can profitably cost and price the reserve services that they offer. The methodology is generally applicable to a wide range of market structures that such firms might face

  17. Potential impacts of electricity price changes on price formation in the economy: a social accounting matrix price modeling analysis for Turkey

    International Nuclear Information System (INIS)

    Akkemik, K. Ali

    2011-01-01

    Recent reforms in the Turkish electricity sector since 2001 aim to introduce a tariff system that reflects costs. This is expected to affect the production and consumer prices of electricity. The changes in electricity prices are then reflected in production costs in other segments of the economy. Subsequently, producer and consumer prices will be affected. The potential impact of the changes in electricity prices that the ongoing electricity reforms in Turkey will bring about may have important implications on the price formation in economic activities and the cost of living for households. This paper evaluates the potential impacts of changes in electricity prices from a social accounting matrix (SAM) price modeling perspective. It is found that based on the estimated price multipliers that prices in the energy-producing sectors, mining, and iron and steel manufacturing sectors would be affected more severely than the remaining sectors of the economy. Consumer prices are affected slightly less than producer prices. - Research Highlights: → The impact of electricity generation costs on prices in other sectors is modeled. → A micro-SAM emphasizing electricity supply is constructed using 2002 I-O tables. → Energy, mining, and steel sectors are more responsive to electricity costs. → Living costs are less responsive to electricity cost changes than producer prices.

  18. 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)

  19. Equity weighting and the marginal damage costs of climate change

    Energy Technology Data Exchange (ETDEWEB)

    Anthoff, David [The Economic and Social Research Institute, Dublin (Ireland)]|[International Max Planck Research School on Earth System Modelling, Hamburg (Germany)]|[Research Unit Sustainability and Global Change, Hamburg University and Centre for Marine and Atmospheric Science, Hamburg (Germany); Hepburn, Cameron [Smith School of Enterprise and the Environment, and James Martin Institute, Said Business School, University of Oxford, and New College, Oxford (United Kingdom); Tol, Richard S.J. [The Economic and Social Research Institute, Dublin (Ireland)]|[Research Unit Sustainability and Global Change, Hamburg University and Centre for Marine and Atmospheric Science, Hamburg (Germany)]|[Institute for Environmental Studies, Vrije Universiteit, Amsterdam (Netherlands)]|[Engineering and Public Policy, Carnegie Mellon University, Pittsburgh, PA (United States)

    2009-01-15

    Climate change will give rise to different impacts in different countries, and different countries have different levels of development. Equity-weighted estimates of the (marginal) impact of greenhouse gas emissions reflect these differences. This paper analyses the impact of equity weighting on the marginal damage cost of carbon dioxide emissions, and reaches four main conclusions. First, equity-weighted estimates are substantially higher than estimates without equity-weights; equity-weights may even change the sign of the social cost estimates. Second, estimates differ by two orders of magnitude depending on the region to which the equity weights are normalised. Third, equity-weighted estimates are sensitive to the resolution of the impact estimates. Depending on the assumed intra-regional income distribution, estimates may be more than twice as high if national rather than regional impacts are aggregated. Fourth, variations in the assumed inequality aversion have different impacts in different scenarios, not only because different scenarios have different emissions and hence warming, but also because different scenarios have different income differences, different growth rates, and different vulnerabilities. (author)

  20. Equity weighting and the marginal damage costs of climate change

    International Nuclear Information System (INIS)

    Anthoff, David; Hepburn, Cameron; Tol, Richard S.J.

    2009-01-01

    Climate change will give rise to different impacts in different countries, and different countries have different levels of development. Equity-weighted estimates of the (marginal) impact of greenhouse gas emissions reflect these differences. This paper analyses the impact of equity weighting on the marginal damage cost of carbon dioxide emissions, and reaches four main conclusions. First, equity-weighted estimates are substantially higher than estimates without equity-weights; equity-weights may even change the sign of the social cost estimates. Second, estimates differ by two orders of magnitude depending on the region to which the equity weights are normalised. Third, equity-weighted estimates are sensitive to the resolution of the impact estimates. Depending on the assumed intra-regional income distribution, estimates may be more than twice as high if national rather than regional impacts are aggregated. Fourth, variations in the assumed inequality aversion have different impacts in different scenarios, not only because different scenarios have different emissions and hence warming, but also because different scenarios have different income differences, different growth rates, and different vulnerabilities. (author)

  1. The Dynamics of Bertrand Price Competition with Cost-Reducing Investments

    DEFF Research Database (Denmark)

    Iskhakov, Fedor; Rust, John; Schjerning, Bertel

    2018-01-01

    We extend the classic Bertrand duopoly model of price competition to a dynamic setting where competing duopolists invest in a stochastically improving production technology to “leapfrog” their rival and attain temporary low cost leadership. We find a huge multiplicity of Markov perfect equilibria...

  2. Computing Cost Price for Cataract Surgery by Activity Based Costing (ABC Method at Hazrat-E-Zahra Hospital, Isfahan University of Medical Sciences, 2014

    Directory of Open Access Journals (Sweden)

    Masuod Ferdosi

    2016-10-01

    Full Text Available Background: Hospital managers need to have accurate information about actual costs to make efficient and effective decisions. In activity based costing method, first, activities are recognized and then direct and indirect costs are computed based on allocation methods. The aim of this study was to compute the cost price for cataract surgery by Activity Based Costing (ABC method at Hazrat-e-Zahra Hospital, Isfahan University of Medical Sciences. Methods: This was a cross- sectional study for computing the costs of cataract surgery by activity based costing technique in Hazrat-e-Zahra Hospital in Isfahan University of Medical Sciences, 2014. Data were collected through interview and direct observation and analyzed by Excel software. Results: According to the results of this study, total cost in cataract surgery was 8,368,978 Rials. Personnel cost included 62.2% (5,213,574 Rials of total cost of cataract surgery that is the highest share of surgery costs. The cost of consumables was 7.57% (1,992,852 Rials of surgery costs. Conclusion: Based on the results, there was different between cost price of the services and public Tariff which appears as hazards or financial crises to the hospital. Therefore, it is recommended to use the right methods to compute the costs relating to Activity Based Costing. Cost price of cataract surgery can be reduced by strategies such as decreasing the cost of consumables.

  3. 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

  4. Transfer prices and the excess cost of Canadian oil imports: New evidence on Bertrand versus Rugman

    International Nuclear Information System (INIS)

    Bernard, J.-T.; Weiner, R.J.

    1992-01-01

    Transfer pricing can be a source for contention between governments and multinational corporations, with suspicion that transfer prices are set so as to report higher income in countries where corporations are taxed more lightly. The first systematic empirical evidence on transfer pricing in multinational corporations is presented, through examination of the Canadian petroleum industry, which is dominated by foreign multinationals. The data cover the period 1974-84 and allow analysis of the allegation of excess cost paid by Canada for crude oil imports. After taking into account crude oil quality indicators, transaction characteristics, and countries of export, the merging of a comparable set of U.S. and Canadian data demonstrates evidence of transfer-price setting at levels significantly different from arm's-length prices for crude oil imports to Canada from 1974-84. However, the evidence runs contrary to Bertrand's assessment: the crude oil prices for affiliate transactions were found to be, in general, lower than comparable prices for third-party transactions. As to transport costs, the converse was found to be the case, however, the effect is much less important than transfer pricing. The overall result is that transfer prices have worked in Canada's favour. 15 refs., 7 tabs

  5. The importance of vehicle costs, fuel prices, and fuel efficiency to HEV market success.

    Energy Technology Data Exchange (ETDEWEB)

    Santini, D. J.; Patterson, P. D.; Vyas, A. D.

    1999-12-08

    Toyota's introduction of a hybrid electric vehicle (HEV) named ''Prius'' in Japan and Honda's proposed introduction of an HEV in the United States have generated considerable interest in the long-term viability of such fuel-efficient vehicles. A performance and cost projection model developed entirely at Argonne National Laboratory (ANL) is used here to estimate costs. ANL staff developed fuel economy estimates by extending conventional vehicle (CV) modeling done primarily under the National Cooperative Highway Research Program. Together, these estimates are employed to analyze dollar costs vs. benefits of two of many possible HEV technologies. We project incremental costs and fuel savings for a Prius-type low-performance hybrid (14.3 seconds zero to 60 mph acceleration, 260 time) and a higher-performance ''mild'' hybrid vehicle, or MHV (11 seconds 260 time). Each HEV is compared to a U.S. Toyota Corolla with automatic transmission (11 seconds 260 time). The base incremental retail price range, projected a decade hence, is $3,200-$3,750, before considering battery replacement cost. Historical data are analyzed to evaluate the effect of fuel price on consumer preferences for vehicle fuel economy, performance, and size. The relationship between fuel price, the level of change in fuel price, and consumer attitude toward higher fuel efficiency is also evaluated. A recent survey on the value of higher fuel efficiency is presented and U.S. commercial viability of the hybrids is evaluated using discount rates of 2090 and 870. Our analysis, with our current HEV cost estimates and current fuel savings estimates, implies that the U.S. market for such HEVS would be quite limited.

  6. Delivering maximum clinical benefit at an affordable price: engaging stakeholders in cancer care.

    Science.gov (United States)

    Kelly, Ronan J; Smith, Thomas J

    2014-03-01

    Cancer costs continue to increase alarmingly despite much debate about how they can be reduced. The oncology community needs to take greater responsibility for our own practice patterns, especially when using expensive tests and treatments with marginal value: we cannot continue to accept novel therapeutics with very small benefits for exorbitant prices. Patients, payers, and pharmaceutical communities should be constructively engaged to communicate medically and economically possible goals, and eventually, to reduce use and costs. Diagnostic tests and treatments should have to show true value to be added to existing protocols. In this article, we discuss three key drivers of costs: end-of-life care patterns, medical imaging, and drugs. We propose health-care models that have the potential to decrease costs and discuss solutions to maintain clinical benefit at an affordable price. Copyright © 2014 Elsevier Ltd. All rights reserved.

  7. Regional and sectoral marginal abatement cost curves for NOx incorporating controls, renewable electricity, energy efficiency and fuel switching

    Science.gov (United States)

    A marginal abatement cost curve (MACC) traces out the relationship between the quantity of pollution abated and the marginal cost of abating each additional unit. In the context of air quality management, MACCs typically are developed by sorting end-of-pipe controls by their resp...

  8. How much does it cost? Physician pricing in the era of consumerism.

    Science.gov (United States)

    Vernon, Robert

    2006-10-01

    Setting physician pricing--whether based on actual costs, historical charges or current competitive forces--faces new challenges. The new consumerism in health care has led to a larger retail market. Patients increasingly pay physicians directly for their services, and the role of third-party payers has changed, if not diminished. Two types of self-pay patients are growing in number, and the challenges to physician pricing strategies are, too.

  9. 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

  10. 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)

  11. Asian Option Pricing with Monotonous Transaction Costs under Fractional Brownian Motion

    Directory of Open Access Journals (Sweden)

    Di Pan

    2013-01-01

    Full Text Available Geometric-average Asian option pricing model with monotonous transaction cost rate under fractional Brownian motion was established. The method of partial differential equations was used to solve this model and the analytical expressions of the Asian option value were obtained. The numerical experiments show that Hurst exponent of the fractional Brownian motion and transaction cost rate have a significant impact on the option value.

  12. 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.

  13. Proportional Transaction Costs in the Robust Control Approach to Option Pricing: The Uniqueness Theorem

    Energy Technology Data Exchange (ETDEWEB)

    El Farouq, Naïma, E-mail: naima.elfarouq@univ-bpclermont.fr [Université Blaise Pascal (Clermont-Ferrand II) (France); Bernhard, Pierre, E-mail: pierre.bernhard@inria.fr [INRIA Sophia Antipolis-Méditerranée (France)

    2015-10-15

    We prove the missing uniqueness theorem for the viscosity solution of a quasi-variational inequality related to a minimax impulse control problem modeling the option pricing with proportional transactions costs. This result makes our robust control approach of option pricing in the interval market model essentially complete.

  14. Proportional Transaction Costs in the Robust Control Approach to Option Pricing: The Uniqueness Theorem

    International Nuclear Information System (INIS)

    El Farouq, Naïma; Bernhard, Pierre

    2015-01-01

    We prove the missing uniqueness theorem for the viscosity solution of a quasi-variational inequality related to a minimax impulse control problem modeling the option pricing with proportional transactions costs. This result makes our robust control approach of option pricing in the interval market model essentially complete

  15. Modelling the transition from cost-based to bid-based pricing in a deregulated electricity-market

    Energy Technology Data Exchange (ETDEWEB)

    Druce, Donald J. [BC Hydro, 6911 Southpoint Drive, Burnaby, British Columbia (Canada)

    2007-12-15

    Alberta is a province in western Canada with a deregulated electricity-market. Market clearing prices for most hours reflect the cost of either coal-fired or gas-fired thermal generation. Whenever there is a chronic shortage of generation or even a temporary one due to an outage, prices can be bid much higher than fuel costs would suggest. The province of British Columbia borders Alberta to the west and its electric utility, BC Hydro, has a history of trade with the utilities in Alberta. BC Hydro has predominantly hydroelectric resources and large storage reservoirs. Prior to Alberta's deregulation in 1996, BC Hydro was able to enter into mutually beneficial load-factoring contracts with the Alberta utilities. Now, as long as the transmission is available, BC Hydro can buy low priced off-peak coal-fired energy and sell into the high priced periods without having to share the benefits. BC Hydro uses a combination of econometric and Monte Carlo modelling to simulate hourly price-duration curves for Alberta that capture both cost-based and bid-based characteristics. This approach provides a good fit with the stochastic dynamic programming model that BC Hydro has developed for its mid-term hydro scheduling. (author)

  16. Natural gas and CO2 price variation: impact on the relative cost-efficiency of LNG and pipelines.

    Science.gov (United States)

    Ulvestad, Marte; Overland, Indra

    2012-06-01

    THIS ARTICLE DEVELOPS A FORMAL MODEL FOR COMPARING THE COST STRUCTURE OF THE TWO MAIN TRANSPORT OPTIONS FOR NATURAL GAS: liquefied natural gas (LNG) and pipelines. In particular, it evaluates how variations in the prices of natural gas and greenhouse gas emissions affect the relative cost-efficiency of these two options. Natural gas is often promoted as the most environmentally friendly of all fossil fuels, and LNG as a modern and efficient way of transporting it. Some research has been carried out into the local environmental impact of LNG facilities, but almost none into aspects related to climate change. This paper concludes that at current price levels for natural gas and CO 2 emissions the distance from field to consumer and the volume of natural gas transported are the main determinants of transport costs. The pricing of natural gas and greenhouse emissions influence the relative cost-efficiency of LNG and pipeline transport, but only to a limited degree at current price levels. Because more energy is required for the LNG process (especially for fuelling the liquefaction process) than for pipelines at distances below 9100 km, LNG is more exposed to variability in the price of natural gas and greenhouse gas emissions up to this distance. If the prices of natural gas and/or greenhouse gas emission rise dramatically in the future, this will affect the choice between pipelines and LNG. Such a price increase will be favourable for pipelines relative to LNG.

  17. The pitfalls of capital budgeting : when costs correlate to oil price. Is the real-options approach superior to traditional valuation?

    Energy Technology Data Exchange (ETDEWEB)

    Schiozer, R.F. [Getulio Vargas Foundation, Sao Paolo (Brazil). School of Administration de Empresas; Costa Lima, G.A.; Suslick, S.B. [Unicamp, Campinas (Brazil). Center of Petroleum Studies

    2007-07-01

    Due to increased demand for drilling rigs, specialized labor force and other resources, the costs of exploration, appraisal, development and production have significantly risen over the last five years. The change in costs has mostly been attributed to the increased activity in the oil and gas exploration and production (EP) industry, as a result of the increase in oil prices. It was hypothesized that operating costs in the EP industry were strongly correlated to the price of oil. However, the correlation between prices and costs has traditionally been overlooked in the capital budgeting process. This paper investigated the economic relationship between oil price and the operating costs in the EP industry. It also explored its implications for the capital budgeting process and decision-making. The paper demonstrated the evaluation of projects under traditional net present value (NPV) and real-option approaches. Empirical evidence was also provided on how costs correlated to oil prices. The differences between project valuation when cost-price correlation was taken into account or not was also discussed. Last, findings, conclusions and general implications of the results obtained for the decision-making process were identified. It was concluded that there was a positive correlation between price and operating costs, and that overlooking this relationship would have significant implications on the valuation of investment projects, both using a traditional NPV methodology, which resulted in undervalued projects, and under real option analysis, which resulted in overvaluing projects. 6 refs., 2 tabs., 5 figs.

  18. The pitfalls of capital budgeting : when costs correlate to oil price. Is the real-options approach superior to traditional valuation?

    International Nuclear Information System (INIS)

    Schiozer, R.F.; Costa Lima, G.A.; Suslick, S.B.

    2007-01-01

    Due to increased demand for drilling rigs, specialized labor force and other resources, the costs of exploration, appraisal, development and production have significantly risen over the last five years. The change in costs has mostly been attributed to the increased activity in the oil and gas exploration and production (EP) industry, as a result of the increase in oil prices. It was hypothesized that operating costs in the EP industry were strongly correlated to the price of oil. However, the correlation between prices and costs has traditionally been overlooked in the capital budgeting process. This paper investigated the economic relationship between oil price and the operating costs in the EP industry. It also explored its implications for the capital budgeting process and decision-making. The paper demonstrated the evaluation of projects under traditional net present value (NPV) and real-option approaches. Empirical evidence was also provided on how costs correlated to oil prices. The differences between project valuation when cost-price correlation was taken into account or not was also discussed. Last, findings, conclusions and general implications of the results obtained for the decision-making process were identified. It was concluded that there was a positive correlation between price and operating costs, and that overlooking this relationship would have significant implications on the valuation of investment projects, both using a traditional NPV methodology, which resulted in undervalued projects, and under real option analysis, which resulted in overvaluing projects. 6 refs., 2 tabs., 5 figs

  19. The impact of reference pricing and extension of generic substitution on the daily cost of antipsychotic medication in Finland.

    Science.gov (United States)

    Koskinen, Hanna; Ahola, Elina; Saastamoinen, Leena K; Mikkola, Hennamari; Martikainen, Jaana E

    2014-12-01

    To assess the impact of reference pricing and extension of generic substitution on the daily cost of antipsychotic drugs in Finland during the first year after its launch. Furthermore, the additional impact of reference pricing on prior implemented generic substitution is assessed. A retrospective analysis was performed between 2006 and 2010. A segmented linear regression analysis of interrupted time series was used to estimate changes in the levels and trends in the cost of one day of treatment. Of the study drugs, clozapine belonged to generic substitution already at the start of the study period while olanzapine and quetiapine were included in generic substitution alongside with reference pricing in 2009. Risperidone was included in generic substitution in 2008, before reference pricing. A substantial decrease in the daily cost of all four antipsychotic substances was seen after one year of the implementation of reference pricing and the extension of generic substitution. The impact ranged from -29.9% to -66.3%, and it was most substantial on the daily cost of olanzapine. Also in the daily cost of risperidone a substantial decrease of -43.3% was observed. However, most of these savings, -32.6%, were generated by generic substitution which had been adopted prior. Reference pricing and the extension of generic substitution produced substantial savings on antipsychotic medication costs during the first year after its launch, but the intensity of the impact differed between active substances. Furthermore, our results suggest that the additional cost savings from reference pricing after prior implemented generic substitution, are comparatively low.

  20. A cost-based empirical model of the aggregate price determination for the Turkish economy: A multivariate cointegration approach

    Directory of Open Access Journals (Sweden)

    Zeren Fatma

    2010-01-01

    Full Text Available This paper tries to examine the long run relationships between the aggregate consumer prices and some cost-based components for the Turkish economy. Based on a simple economic model of the macro-scaled price formation, multivariate cointegration techniques have been applied to test whether the real data support the a priori model construction. The results reveal that all of the factors, related to the price determination, have a positive impact on the consumer prices as expected. We find that the most significant component contributing to the price setting is the nominal exchange rate depreciation. We also cannot reject the linear homogeneity of the sum of all the price data as to the domestic inflation. The paper concludes that the Turkish consumer prices have in fact a strong cost-push component that contributes to the aggregate pricing.

  1. Electric energy deficit marginal cost: historic, evaluation and proposition of a new method; Custo marginal do deficit de energia eletrica: historico, avaliacao e proposta de uma nova metodologia

    Energy Technology Data Exchange (ETDEWEB)

    Loureiro, Paulo Gerson Cayres

    2009-05-15

    The optimization model actually used to the energy operation planning of the National Interconnected System - NIS has as objective function the minimization of expected total cost operation. To achieve this goal the model provides optimal allocation of hydrothermal resources during the study horizon, employing aggregated subsystems. The deficit marginal cost is a parameter which is explicitly informed to the model, and does a part in the operation total cost calculation being a predominant factor in the service conditions evaluation of national electric energy market, affecting the energy costs and the risk of deficit on NIS. In this work is realized an integral study about the electric energy deficit marginal cost, starting with a historical review, followed by a actualization of your actual value and a propose of a new method for the calculation of deficit marginal cost value. The studies shows the impact of the values found over service conditions to the electric energy market in the energy operation planning, focusing on some usual indicators adopted in studies of the electrical sector. (author)

  2. 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.

  3. Marginal costs of water savings from cooling system retrofits: a case study for Texas power plants

    Science.gov (United States)

    Loew, Aviva; Jaramillo, Paulina; Zhai, Haibo

    2016-10-01

    The water demands of power plant cooling systems may strain water supply and make power generation vulnerable to water scarcity. Cooling systems range in their rates of water use, capital investment, and annual costs. Using Texas as a case study, we examined the cost of retrofitting existing coal and natural gas combined-cycle (NGCC) power plants with alternative cooling systems, either wet recirculating towers or air-cooled condensers for dry cooling. We applied a power plant assessment tool to model existing power plants in terms of their key plant attributes and site-specific meteorological conditions and then estimated operation characteristics of retrofitted plants and retrofit costs. We determined the anticipated annual reductions in water withdrawals and the cost-per-gallon of water saved by retrofits in both deterministic and probabilistic forms. The results demonstrate that replacing once-through cooling at coal-fired power plants with wet recirculating towers has the lowest cost per reduced water withdrawals, on average. The average marginal cost of water withdrawal savings for dry-cooling retrofits at coal-fired plants is approximately 0.68 cents per gallon, while the marginal recirculating retrofit cost is 0.008 cents per gallon. For NGCC plants, the average marginal costs of water withdrawal savings for dry-cooling and recirculating towers are 1.78 and 0.037 cents per gallon, respectively.

  4. The Copenhagen Accord: abatement costs and carbon prices resulting from the submissions

    International Nuclear Information System (INIS)

    Elzen, Michel G.J. den; Hof, Andries F.; Mendoza Beltran, Angelica; Grassi, Giacomo; Roelfsema, Mark; Ruijven, Bas van; Vliet, Jasper van; Vuuren, Detlef P. van

    2011-01-01

    As part of the Copenhagen Accord, individual countries have submitted greenhouse gas reduction proposals for the year 2020. This paper analyses the implications for emission reductions, the carbon price, and abatement costs of these submissions. The submissions of the Annex I (industrialised) countries are estimated to lead to a total reduction target of 12-18% below 1990 levels. The submissions of the seven major emerging economies are estimated to lead to an 11-14% reduction below baseline emissions, depending on international (financial) support. Global abatement costs in 2020 are estimated at about USD 60-100 billion, assuming that at least two-thirds of Annex I emission reduction targets need to be achieved domestically. The largest share of these costs are incurred by Annex I countries, although the costs as share of GDP are similar for Annex I as a group and the seven emerging economies as a group, even when assuming substantial international transfers from Annex I countries to the emerging economies to finance their abatement costs. If the restriction of achieving two-thirds of the emission reduction target domestically is abandoned, it would more than double the international carbon price and at the same time reduce global abatement costs by almost 25%.

  5. 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

  6. 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

  7. Cost accounting selling price formation: a case study in an industry of pneumatic suspensions of Caxias do Sul-RS

    Directory of Open Access Journals (Sweden)

    Gisele Carina Pistore

    2015-04-01

    Full Text Available This study analyzes the contributions of cost accounting in the sale price formation in a pneumatic suspension industry. They present as main guiding authors of this study, Crepaldi (2009 and Martins (2003. This study is characterized as an exploratory research with a qualitative and quantitative approach, using the methodological approach of case study. Still, it uses the interview technique with experts in the field, with the director and an employee of the company. Data analysis is based on documentary research and content analysis. We present further calculations of labor cost, selling price formation and demonstration of profitability, based on information obtained in the company, to answer the research problem and propose the intervention proposal. This study aims to present a proposal for improvements in forming selling price, seeking to improve performance, reduce costs, save income developing new controls, in order to make it more competitive company studied. The proposed intervention is that the company create new cost centers, use costing methods, assessment criteria and form your price based on the markup taking into account the market price.

  8. 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.

  9. 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

  10. Prediction of Change in Prescription Ingredient Costs and Co-payment Rates under a Reference Pricing System in South Korea.

    Science.gov (United States)

    Heo, Ji Haeng; Rascati, Karen L; Lee, Eui-Kyung

    2017-05-01

    The reference pricing system (RPS) establishes reference prices within interchangeable reference groupings. For drugs priced higher than the reference point, patients pay the difference between the reference price and the total price. To predict potential changes in prescription ingredient costs and co-payment rates after implementation of an RPS in South Korea. Korean National Health Insurance claims data were used as a baseline to develop possible RPS models. Five components of a potential RPS policy were varied: reference groupings, reference pricing methods, co-pay reduction programs, manufacturer price reductions, and increased drug substitutions. The potential changes for prescription ingredient costs and co-payment rates were predicted for the various scenarios. It was predicted that transferring the difference (total price minus reference price) from the insurer to patients would reduce ingredient costs from 1.4% to 22.8% for the third-party payer (government), but patient co-payment rates would increase from a baseline of 20.4% to 22.0% using chemical groupings and to 25.0% using therapeutic groupings. Savings rates in prescription ingredient costs (government and patient combined) were predicted to range from 1.6% to 13.7% depending on various scenarios. Although the co-payment rate would increase, a 15% price reduction by manufacturers coupled with a substitution rate of 30% would result in a decrease in the co-payment amount (change in absolute dollars vs. change in rates). Our models predicted that the implementation of RPS in South Korea would lead to savings in ingredient costs for the third-party payer and co-payments for patients with potential scenarios. Copyright © 2017 International Society for Pharmacoeconomics and Outcomes Research (ISPOR). Published by Elsevier Inc. All rights reserved.

  11. The Low Cost Airline Consumer Price Sensitivity. An Investigation on The Mediating Role of Promotion and Trust in Brand

    Directory of Open Access Journals (Sweden)

    Janfry Sihite

    2014-12-01

    Full Text Available The ASEAN Open Sky Policy is one of ASEAN policy to open the airspace between the ASEAN member countries. Aviation services based companies including the Low Cost airlines will experience tight com-petition among ASEAN airline companies. This research aim to explore the effect of price on customer loyalty through the mediating role of promotion and trust in brand. The original sample collected from 100 Indonesian low-cost airline Citilink consumer that just arrived in Soekarno-Hatta International Airport, the bootstrapped techniques conducted for 500 sub-samples and further analyzed with structural equation modelling partial least square. The research findings support the low cost airline consumer price sensitivity, furthermore price affect the trust in brand more severe compared with the promotion. Price effect fully mediated through the trust in brand and promotion toward the consumer loyalty. Further research should consider the sensitivity of price to elaborate the decision making process for the low cost air-line consumer.

  12. The Low Cost Airline Consumer Price Sensitivity. An Investigation on The Mediating Role of Promotion and Trust in Brand

    Directory of Open Access Journals (Sweden)

    Janfry Sihite

    2014-12-01

    Full Text Available The ASEAN Open Sky Policy is one of ASEAN policy to open the airspace between the ASEAN member countries. Aviation services based companies including the Low Cost airlines will experience tight com-petition among ASEAN airline companies. This research aim to explore the effect of price on customer loyalty through the mediating role of promotion and trust in brand. The original sample collected from 100 Indonesian low-cost airline Citilink consumer that just arrived in Soekarno-Hatta International Airport, the bootstrapped techniques conducted for 500 sub-samples and further analyzed with structural equation modelling partial least square. The research findings support the low cost airline consumer price sensitivity, furthermore price affect the trust in brand more severe compared with the promotion. Price effect fully mediated through the trust in brand and promotion toward the consumer loyalty. Further research should consider the sensitivity of price to elaborate the decision making process for the low cost airline consumer.

  13. A win-win marginal rent analysis for operator and consumer under battery leasing mode in China electric vehicle market

    International Nuclear Information System (INIS)

    Li Zhe; Ouyang Minggao

    2011-01-01

    Recently battery leasing has been introduced into the market by automobile manufacturers and power suppliers due to its potential to reduce the purchase cost of electric vehicles (EVs). However, the profit prospect of battery leasing is still uncertain. This paper takes the views of both the operators and consumers and calculates the 'win-win' marginal rent, which not only ensures the profitability of operators, but also allows consumers a lower expenditure than using Internal combustion engine vehicles (ICVs) and EVs with embedded batteries. Battery cost, vehicle weight, gasoline and electricity price, and the discount rate have impacts on the rent. Battery cost plays a dominant role and a battery cost >5 Yen /W h fails to enable the survival of battery leasing to all types of EVs. Battery leasing would be more competitive when focusing on heavier EVs. At least one of the three thresholds is required for the existence of rent pricing range for a 1000 kg EV: gasoline retail price >6 Yen /L, electricity price <0.6 Yen /kW h, or the discount rate <7%. Typically, the feasible battery rent range is 0.34-0.38 Yen /W h/year for a 1000 kg EV under the present battery cost 2 Yen /W h and China current gasoline and electricity prices. - Highlights: → Rent pricing for EV battery leasing must obey win-win rule for BLO and consumers. → Rent is affected by battery cost, vehicle weight, energy price and discount rate. → Battery cost plays dominant role for the BLO survival as described in '5-3-2' Law. → Heavier EVs are more suitable for battery leasing when battery cost is high. → The profitability of BLO is sensitive to the price of gasoline and electricity.

  14. A cost-benefit analysis of alternatively fueled buses with special considerations for V2G technology

    International Nuclear Information System (INIS)

    Shirazi, Yosef; Carr, Edward; Knapp, Lauren

    2015-01-01

    Motivated by climate, health and economic considerations, alternatively-fueled bus fleets have emerged worldwide. Two popular alternatives are compressed natural gas (CNG) and electric vehicles. The latter provides the opportunity to generate revenue through vehicle-to-grid (V2G) services if properly equipped. This analysis conducts a robust accounting of the costs of diesel, CNG and battery-electric powertrains for school buses. Both marginal and fleet-wide scenarios are explored. Results indicate that the marginal addition of neither a small CNG nor a small V2G-enabled electric bus is cost effective at current prices. Contrary to previous findings, a small V2G-enabled electric bus increases net present costs by $7,200/seat relative to diesel for a Philadelphia, PA school district. A small CNG bus increases costs by $1,200/seat relative to diesel. This analysis is the first to quantify and include the economic implications of cold temperature extremes on electric vehicle battery operations, and the lower V2G revenues that result. Additional costs and limitations imposed by electric vehicles performing V2G are frequently overlooked in the literature and are explored here. If a variety of technical, legal, and economic challenges are overcome, a future eBus may be economical. - Highlights: • We present a robust cost-benefit analysis of various bus technologies. • Diesel is a low-cost technology at current prices. • CNG represents slightly higher costs on a marginal bus basis. • V2G-enabled electric buses are not cost-effective at current prices. • We identify frequently overlooked costs and challenges to V2G implementation.

  15. 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)

  16. STUDI BANDING PENYUSUNAN LAPORAN KEUANGAN DENGAN METODE HISTORICAL COST ACCOUNTING DAN GENERAL PRICE LEVEL ACCOUNTING PADA MASA INFLASI

    Directory of Open Access Journals (Sweden)

    David Sukardi Kodrat

    2006-01-01

    Full Text Available Generally, Financial Statements are based on Historical Cost Accounting (HCA that assumes that prices are stable. Actually, there are several methods on accounting for the effect of changing prices, such as Current Cost Accounting (Replacement Cost Accounting and Constant Dollar Accounting or General Price Level Accounting (GPLA. GPLA will do restatement the components of financial statement to be a rupiah on a similar level of purchasing power, but without changes in accounting principles which using on conventional accounting. Financial statements made by GPLA are comparing to financial statements made by HCA. Both of financial statements are analysis with NOD (Number of Dollar attribute to know that financial statements are interpretative and analysis with COG (Command of Good attribute to know that financial statements are relevant. Abstract in Bahasa Indonesia : Laporan keuangan disusun berdasarkan metode Historical Cost Accounting (HCA yang menggunakan asumsi nilai tukar stabil. Beberapa metode akuntansi yang memperhitungkan perubahan nilai tukar seperti Current Cost Accounting (Replacement Cost Accounting dan Constant Dollar Accounting atau General Price Level Accounting (GPLA. GPLA menyajikan komponen laporan keuangan berdasarkan penyesuaian rupiah dengan daya beli tanpa mengubah prinsip-prinsip akuntasi konvensional. Laporan keuangan yang disusun dengan GPLA dapat diperbandingkan dengan laporan keuangan berdasarkan HCA. Dengan analisa NOD (Number of Dollar dan COG (Command Over Good attribute menunjukkan bahwa laporan keuangan berdasarkan GPLA lebih interpretatif dan lebih relevan. Kata Kunci: Laporan Keuangan, Historical Cost Accounting, General Price Level Accounting, NOD attribute, COG attribute.

  17. 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)

  18. Energy transition. A complete view on costs, performance, flexibility and prices of energies - Journal nr 11

    International Nuclear Information System (INIS)

    Boncorps, Jean-Claude; Larzilliere, Marc; Bomo, Nicole; Bruder, Michel; Buscailhon, Jean-Marie; Cappe, Daniel; DobiaS, Georges; Fregere, Jean-Pierre; Garipuy, Yves; Hougueres, Gerard; Martin, Jean-Loup; Mollard, Dominique; Moncomble, Jean-Eudes; Wiltz, Bruno; Roudier, Jacques

    2013-02-01

    This publication aims at proposing information on the issues of energy prices, of energy production costs and of energy delivery costs, and at showing their complexity while clearing up some wrong ideas about them. After an introduction on the addressed problematic, on information sources and on uncertainties, the authors give a general overview of the definitions of a cost, of a price, of primary, secondary and final energies, of user diversity and energy demand variation in time, of energy production variations in time, and present energy taxing in France and in the European Union, the CO 2 market, and energy savings in France in various sectors (transports, buildings, industry). Then, they address the various primary energies (coal, oil, natural gas, biomass, geothermal heat, thermal solar) and secondary energies (nuclear, hydroelectricity, ground-based wind energy, renewable sea energies, geothermal electricity, electricity grids, heat networks and co-generation) and discuss for each or some of them issues like: world market, costs and pricing, perspectives, resources and constraints, technologies

  19. The economics of wind and solar variability. How the variability of wind and solar power affects their marginal value, optimal deployment, and integration costs

    Energy Technology Data Exchange (ETDEWEB)

    Hirth, Lion

    2014-11-14

    homogenous and heterogeneous along three dimensions - time, space, and lead-time. Electricity's heterogeneity is rooted in its physics, notably the fact it cannot be stored. (Only) because of heterogeneity, the economics of wind and solar power are affected by their variability. The impact of variability, expressed in terms of marginal value, can be quite significant: for example, at 30% wind market share, electricity from wind power is worth 30-50% less than electricity from a constant source, as this study estimates. This value drop stems mainly from the fact that the capital embodied in thermal plants is utilized less in power systems with high VRE shares. Any welfare analysis of VRE needs to take electricity's heterogeneity into account. The impact of variability on VRE cannot only be expressed in terms of marginal value, but also in terms of costs, or in terms of optimal deployment. The mentioned value drop corresponds to an increase of costs by 30-50%, or a reduction of the optimal share by two thirds. These findings lead to seven policy conclusions: 1. Wind power will play a significant role (compared to today). 2. Wind power will play a limited role (compared to some political ambitions). 3. There are many effective options to integrate wind power into power systems, including transmission investments, flexibilizing thermal generators, and advancing wind turbine design. Electricity storage, in contrast, plays a limited role (however, it can play a larger role for integrating solar). 4. For these integration measures to materialize, it is important to get both prices and policies right. Prices need to reflect marginal costs, entry barriers should be tiered down, and policy must not shield agents from incentives. 5. VRE capacity should be brought to the system at a moderate pace. 6. VRE do not go well together with nuclear power or carbon capture and storage - these technologies are too capital intensive. 7. Large-scale VRE deployment is not only an

  20. The economics of wind and solar variability. How the variability of wind and solar power affects their marginal value, optimal deployment, and integration costs

    International Nuclear Information System (INIS)

    Hirth, Lion

    2014-01-01

    homogenous and heterogeneous along three dimensions - time, space, and lead-time. Electricity's heterogeneity is rooted in its physics, notably the fact it cannot be stored. (Only) because of heterogeneity, the economics of wind and solar power are affected by their variability. The impact of variability, expressed in terms of marginal value, can be quite significant: for example, at 30% wind market share, electricity from wind power is worth 30-50% less than electricity from a constant source, as this study estimates. This value drop stems mainly from the fact that the capital embodied in thermal plants is utilized less in power systems with high VRE shares. Any welfare analysis of VRE needs to take electricity's heterogeneity into account. The impact of variability on VRE cannot only be expressed in terms of marginal value, but also in terms of costs, or in terms of optimal deployment. The mentioned value drop corresponds to an increase of costs by 30-50%, or a reduction of the optimal share by two thirds. These findings lead to seven policy conclusions: 1. Wind power will play a significant role (compared to today). 2. Wind power will play a limited role (compared to some political ambitions). 3. There are many effective options to integrate wind power into power systems, including transmission investments, flexibilizing thermal generators, and advancing wind turbine design. Electricity storage, in contrast, plays a limited role (however, it can play a larger role for integrating solar). 4. For these integration measures to materialize, it is important to get both prices and policies right. Prices need to reflect marginal costs, entry barriers should be tiered down, and policy must not shield agents from incentives. 5. VRE capacity should be brought to the system at a moderate pace. 6. VRE do not go well together with nuclear power or carbon capture and storage - these technologies are too capital intensive. 7. Large-scale VRE deployment is not only an

  1. 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.

  2. The Role of Inflation and Price Escalation Adjustments in Properly Estimating Program Costs: F-35 Case Study

    Science.gov (United States)

    2016-03-01

    standard practice is to deflate costs to constant dollars (the dependent variable in the analogous regression) using a previously determined price ...I N S T I T U T E F O R D E F E N S E A N A L Y S E S IDA Document D-5489 March 2016 The Role of Inflation and Price Escalation Adjustments in...DFARS 252.227-7013 (a)(16) [Jun 2013]. The Role of Inflation and Price Escalation Adjustments in Properly Estimating Program Costs: F-35 Case Study

  3. Fixed and variable cost of automobiles

    DEFF Research Database (Denmark)

    Mulalic, Ismir; Rouwendal, Jan

    costs of various quality aspects using an extensive Danish data set. We show that under suitable assumptions the marginal willingness to pay for quality aspects is a structural parameter of the consumer’s preference. We use our results to investigate this structural parameter and study its relationship......Recent empirical analyses have found strong reactions of car prices to changes in fuel costs. We develop a model of car quality choice to further investigate this relationship. We show that in the empirically relevant case quality characteristics increase fixed as well as variable costs, and our...

  4. Uncovering the Hidden Transaction Costs of Market Power

    DEFF Research Database (Denmark)

    Foss, Kirsten; Foss, Nicolai J.; Klein, Peter G.

    2018-01-01

    A central construct in competitive strategy research is market power, the ability to raise price above marginal cost. Positioning research focuses on attempts to build, protect, and exercise market power. However, this approach contains hidden assumptions about transaction costs. Parties made worse...... off by the exercise of market power can negotiate, bargain, form coalitions, and otherwise contract around the focal firm's attempts to appropriate monopoly profits—depending on transaction costs. We build on property rights economics to explain how transaction costs affect positioning and offer...

  5. Ownership, competition, and the adoption of new technologies and cost-saving practices in a fixed-price environment.

    Science.gov (United States)

    Hirth, R A; Chernew, M E; Orzol, S M

    2000-01-01

    Advances in medical technology have been implicated as the primary cause of rising health care expenditures. It is not yet known whether the increasing prevalence of managed care mechanisms, particularly capitation, will change substantially incentives for acquiring and using cost-increasing innovations. We examined the decisions of dialysis units (a set of providers that has faced capitation and real decreases in payment for several decades) with respect to use of cost-increasing technologies that enhance quality of care, cost-cutting practices that reduce quality of care, and amenities desired by patients that are unrelated to quality of care. We found that the dialysis payment system does not appear to have blocked access to a number of new, quality-enhancing technologies that were developed in the 1980s. However, facilities made adjustments along other valuable margins to facilitate adoption of these technologies; use of new technologies varied with numerous facility, regulatory, and case-mix characteristics including ownership, chain membership, size, market competition, and certificate of need programs. Interestingly, the trade-offs made by for-profit and nonprofit facilities when faced with fixed prices appeared quite different. For-profits tended to deliver lower technical quality of care but more amenities, while nonprofits favored technical quality of care over amenities. Our findings may have implications for the response of other types of health care providers to capitation and increasing economic constraints.

  6. 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)

  7. 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)

  8. Marginal cost calculation of energy production in hydro thermoelectric systems considering the transmission system; Calculo do custo marginal de producao de energia em sistemas hidrotermoeletricos levando em consideracao a rede de transmissao

    Energy Technology Data Exchange (ETDEWEB)

    Pereira, M V.F. [Pontificia Univ. Catolica do Rio de Janeiro, RJ (Brazil); Gorenstin, B G [Centro de Pesquisas de Energia Eletrica, Rio de Janeiro, RJ (Brazil); Alvarenga Filho, S [ELETROBRAS, Rio de Janeiro, RJ (Brazil)

    1990-12-31

    The alternatives for calculation of energy marginal cost in hydroelectric systems, considering the transmission one, was analysed, including fundamental concepts; generation/transmission systems, represented by linear power flow model; production marginal costs in hydrothermal systems and computation aspects. (C.G.C.). 11 refs, 5 figs.

  9. Renewable electricity production costs-A framework to assist policy-makers' decisions on price support

    International Nuclear Information System (INIS)

    Dinica, Valentina

    2011-01-01

    Despite recent progress, the production costs for renewable electricity remain above those for conventional power. Expectations of continuous reductions in production costs, typically underpin governments' policies for financial support. They often draw on the technology-focused versions of the Experience Curve model. This paper discusses how national-contextual factors also have a strong influence on production costs, such as geographic, infrastructural, institutional, and resource factors. As technologies mature, and as they reach significant levels of diffusion nationally, sustained increases in production costs might be recorded, due to these nationally contextual factors, poorly accounted for in policy-making decisions for price support. The paper suggests an analytical framework for a more comprehensive understanding of production costs. Based on this, it recommends that the evolution of specific cost levels and factors be monitored to locate 'sources of changes'. The paper also suggests policy instruments that governments may use to facilitate cost decreases, whenever possible. The application of the framework is illustrated for the diffusion of wind power in Spain during the past three decades. - Highlights: → Models, frameworks for policy-making on price support for renewable electricity production costs. → Policy instruments to help reduce production costs. → Limits to the influence of policies of production costs reductions.

  10. 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.

  11. Enhancing the comparability of costing methods: cross-country variability in the prices of non-traded inputs to health programmes.

    Science.gov (United States)

    Johns, Benjamin; Adam, Taghreed; Evans, David B

    2006-04-24

    National and international policy makers have been increasing their focus on developing strategies to enable poor countries achieve the millennium development goals. This requires information on the costs of different types of health interventions and the resources needed to scale them up, either singly or in combinations. Cost data also guides decisions about the most appropriate mix of interventions in different settings, in view of the increasing, but still limited, resources available to improve health. Many cost and cost-effectiveness studies include only the costs incurred at the point of delivery to beneficiaries, omitting those incurred at other levels of the system such as administration, media, training and overall management. The few studies that have measured them directly suggest that they can sometimes account for a substantial proportion of total costs, so that their omission can result in biased estimates of the resources needed to run a programme or the relative cost-effectiveness of different choices. However, prices of different inputs used in the production of health interventions can vary substantially within a country. Basing cost estimates on a single price observation runs the risk that the results are based on an outlier observation rather than the typical costs of the input. We first explore the determinants of the observed variation in the prices of selected "non-traded" intermediate inputs to health programmes--printed matter and media advertising, and water and electricity--accounting for variation within and across countries. We then use the estimated relationship to impute average prices for countries where limited data are available with uncertainty intervals. Prices vary across countries with GDP per capita and a number of determinants of supply and demand. Media and printing were inelastic with respect to GDP per capita, with a positive correlation, while the utilities had a surprisingly negative relationship. All equations had

  12. 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.)

  13. Cost of Capital in Price-regulated Companies: the Case of Estonia

    Directory of Open Access Journals (Sweden)

    Priit Sander

    2013-01-01

    Full Text Available In case of price-regulated companies it is the role of appropriate government agencies to introduce clear, internally consistent, theoretically sound, and unambiguous methodology for finding the regulative cost of capital. The aim of the paper is to describe and analyze the cost of capital estimation methodology for regulated companies in Estonia and discuss some issues arising in applying this methodology. The current paper focuses on two topical issues associated with the estimation of regulative cost of capital in Estonia: estimation of market risk premium and inclusion of currency risk premium into the cost of capital. Current turmoil in financial markets has increased investors’ risk aversion as well as level of risks.

  14. Valuing inter-sectoral costs and benefits of interventions in the healthcare sector: methods for obtaining unit prices.

    Science.gov (United States)

    Drost, Ruben M W A; Paulus, Aggie T G; Ruwaard, Dirk; Evers, Silvia M A A

    2017-02-01

    There is a lack of knowledge about methods for valuing health intervention-related costs and monetary benefits in the education and criminal justice sectors, also known as 'inter-sectoral costs and benefits' (ICBs). The objective of this study was to develop methods for obtaining unit prices for the valuation of ICBs. By conducting an exploratory literature study and expert interviews, several generic methods were developed. The methods' feasibility was assessed through application in the Netherlands. Results were validated in an expert meeting, which was attended by policy makers, public health experts, health economists and HTA-experts, and discussed at several international conferences and symposia. The study resulted in four methods, including the opportunity cost method (A) and valuation using available unit prices (B), self-constructed unit prices (C) or hourly labor costs (D). The methods developed can be used internationally and are valuable for the broad international field of HTA.

  15. Groups, Pricing, and Cost of Debt: Evidence from Turkey

    Directory of Open Access Journals (Sweden)

    A. Melih Küllü

    2018-03-01

    Full Text Available The paper examines the impact of business group affiliation on cost of loans in an emerging market setting. It focuses on operational strategy, organizational structure and internationalization policies of business group firms and their impact on borrowing cost of affiliated firms. Bank loans are a dominant source of corporate funding in emerging markets, in which business groups exist as leading economic entities. Yet, the impact of belonging to a group on the firm’s cost of debt has not been studied in depth. Our results reveal that the extent of group affiliation, government ownership, and diversification increase the cost of loans. However, a group bank is advantageous in terms of borrowing, and decreases the cost of loans. While foreign ownership is beneficial in terms of pricing, being affiliated with a foreign group is not. Being a financial firm and being cross-listed are not significantly associated with bank loan terms. Borrowing costs are thus influenced in various ways by organizational structure, operational strategies, and global policies of business groups and affiliates. Therefore, business groups may benefit from strategically implementing policies and selecting loan applicant firms.

  16. Price and utilization: why we must target both to curb health care costs.

    Science.gov (United States)

    Spiro, Topher; Lee, Emily Oshima; Emanuel, Ezekiel J

    2012-10-16

    The United States spends nearly $8000 per person on health care annually. Even for a wealthy country, this amount is substantially more than would be expected and 2.5 times the average spent by other Organization for Economic Cooperation and Development (OECD) countries. The growth rate of health care spending in the United States has also far outpaced that in all other high-income OECD countries since 1970, even accounting for population growth. This increase in health spending threatens to squeeze out critical investments in education and infrastructure. To successfully develop and implement policies that effectively address both the level and growth of U.S. health care costs, it is critical to first understand cost drivers. Many health policy and economics scholars have contributed to an ongoing debate on whether to blame high prices or high utilization of services for escalating health care spending in the United States. This paper argues that price and volume both contribute to high and increasing health care costs, along with high administrative costs, supply issues, and the fee-for-service payment system. Initial strategies to contain costs might include implementation and expansion of bundled payment systems and competitive bidding.

  17. 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)

  18. 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.

  19. Adaptive Marginal Costs-Based Distributed Economic Control of Microgrid Clusters Considering Line Loss

    Directory of Open Access Journals (Sweden)

    Xiaoqian Zhou

    2017-12-01

    Full Text Available When several microgrids (MG are interconnected into microgrid clusters (MGC, they have great potential to improve their reliability. Traditional droop control tends to make the total operating costs higher as the power is distributed by capacity ratios of distributed energy resources (DERs. This paper proposes an adaptive distributed economic control for islanded microgrids which considers line loss, specifically, an interesting marginal costs-based economic droop control is proposed, and consensus-based adaptive controller is applied, to deal with power limits and capacity constraints for storage. The whole expense can be effectively lowered by achieving identical marginal costs for DERs in MGC. Specially, the capacity constraints only for storages are also included to do further optimization. Moreover, consensus-based distributed secondary controllers are used to rapidly restore system frequency and voltage magnitudes. The above controllers only need to interact with neighbor DERs by a sparse communication network, eliminating the necessity of a central controller and enhancing the stability. A MGC, incorporating three microgrids, is used to verify the effectiveness of the proposed methods.

  20. Value-based pricing

    OpenAIRE

    Netseva-Porcheva Tatyana

    2010-01-01

    The main aim of the paper is to present the value-based pricing. Therefore, the comparison between two approaches of pricing is made - cost-based pricing and value-based pricing. The 'Price sensitively meter' is presented. The other topic of the paper is the perceived value - meaning of the perceived value, the components of perceived value, the determination of perceived value and the increasing of perceived value. In addition, the best company strategies in matrix 'value-cost' are outlined. .

  1. 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

  2. Marginal cost curves for water footprint reduction in irrigated agriculture: a policy and decision making guide for efficient water use in crop production

    Science.gov (United States)

    Chukalla, Abebe; Krol, Maarten; Hoekstra, Arjen

    2016-04-01

    Reducing water footprints (WF) in irrigated crop production is an essential element in water management, particularly in water-scarce areas. To achieve this, policy and decision making need to be supported with information on marginal cost curves that rank measures to reduce the WF according to their cost-effectiveness and enable the estimation of the cost associated with a certain WF reduction target, e.g. towards a certain reasonable WF benchmark. This paper aims to develop marginal cost curves (MCC) for WF reduction. The AquaCrop model is used to explore the effect of different measures on evapotranspiration and crop yield and thus WF that is used as input in the MCC. Measures relate to three dimensions of management practices: irrigation techniques (furrow, sprinkler, drip and subsurface drip); irrigation strategies (full and deficit irrigation); and mulching practices (no mulching, organic and synthetic mulching). A WF benchmark per crop is calculated as resulting from the best-available production technology. The marginal cost curve is plotted using the ratios of the marginal cost to WF reduction of the measures as ordinate, ranking with marginal costs rise with the increase of the reduction effort. For each measure, the marginal cost to reduce WF is estimated by comparing the associated WF and net present value (NPV) to the reference case (furrow irrigation, full irrigation, no mulching). The NPV for each measure is based on its capital costs, operation and maintenances costs (O&M) and revenues. A range of cases is considered, including: different crops, soil types and different environments. Key words: marginal cost curve, water footprint benchmark, soil water balance, crop growth, AquaCrop

  3. Cost, price and profit: what influences students' decisions about fundraising?

    Science.gov (United States)

    Sawatzki, Carly; Goos, Merrilyn

    2018-02-01

    This article examines some of the complexities associated with developing financially literate, enterprising young Australians through school education. We aimed to explore what seems to influence students in pricing goods for sale within their school community. Data were collected from more than 300 years 5 and 6 students (10-12 years of age) in four government primary schools in urban Darwin. Students were asked to respond to problem contexts involving fundraising as an example of an enterprise activity. The findings reveal that familiarity with fundraising initiatives, personal values, and language and literacy skills shaped the responses students gave. Students who gave loss-making and break-even responses were price conscious, but also tended to confuse terminology influencing mathematisation—i.e., "cost", "price" and "profit". Students who gave profit-making responses applied reasoning that was mathematical, financial and entrepreneurial, giving explanations that distinguished between these terms. We argue that these insights contribute to our understanding how upper primary school students interpret and respond to financial problems, with useful implications for schools and teachers.

  4. Cost efficiency with triangular fuzzy number input prices: An application of DEA

    International Nuclear Information System (INIS)

    Bagherzadeh Valami, H.

    2009-01-01

    The cost efficiency model (CE) has been considered by researchers as a Data Envelopment Analysis (DEA) model for evaluating the efficiency of DMUs. In this model, the possibility of producing the outputs of a target DMU is evaluated by the input prices of the DMU. This provides a criterion for evaluating the CE of DMUs. The main contribution of this paper is to provide an approach for generalizing the CE of DMUs when their input prices are triangular fuzzy numbers, where preliminary concepts of fuzzy theory and CE, are directly used.

  5. 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...

  6. Econometric analysis of the effect of marketing costs on grain prices ...

    African Journals Online (AJOL)

    Econometric analysis of the effect of marketing costs on grain prices in Kaduna State of Nigeria. JAL Effiong. Abstract. No Abstract. Journal of Agriculture and Social Research Vol. 6 (1) 2006: pp. 11-14. Full Text: EMAIL FREE FULL TEXT EMAIL FREE FULL TEXT · DOWNLOAD FULL TEXT DOWNLOAD FULL TEXT.

  7. MANAGERIAL ACCOUNTING AND PRICING FOR SALE OF GOODS AND PRODUCTS IN TRADE AND PUBLIC CATERING

    Directory of Open Access Journals (Sweden)

    TUHARI Tudor

    2017-06-01

    Full Text Available The most relevant problems of accounting and control in the sphere of commodity exchange are the reliable determination of the cost of mass goods and products during their storage and sale, as well as the operational orientation in pricing, taking into account the demand and supply in the interests of obtaining the necessary profit at an appropriate level of profitability. In the case of the sum stock accounting method for the goods in the retail trade and public catering, the especially important element of the accounting is the process of formation of retail sales prices and calculation of production cost of sales and profit of the enterprise. The article mainly focuses on the method of determining the retail sales prices for goods and products in the area of trade and public catering, respectively, through the use of trade mark-ups in percentage terms in relation not to the purchase, but to retail sales prices including VAT. Determining the cost of sales and its accounting is recommended to adjust only at the end of the month based on the calculation of the average percentage of trade mark-up (margin.

  8. Electricity pricing policy and rational energy use and conservation

    International Nuclear Information System (INIS)

    Faure-Mallen, A.

    1995-01-01

    With a threefold combination of rate system /R and D industrial policy/ communication and information for customers, the French electrical system appears as a major actor in Demand Side Management. Especially, the electricity tariffs are a cost reflective rate system which had been implemented and adapted over several decades with an efficient impact on national electricity load curve. As a part of IRP (integrated resources planning), within the global regulation of the energy supply and demand system, tariffs based on marginal costs have a double function: 1) tariffs reflect costs of different kind of supplies; 2) tariffs are an economic signal for customers. These pricing principles alone provide incentive for energy savings through peak-day-demand-reduction of transfer to less costly off-peak period, when they are economically sound

  9. 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.

  10. Value-based pricing

    Directory of Open Access Journals (Sweden)

    Netseva-Porcheva Tatyana

    2010-01-01

    Full Text Available The main aim of the paper is to present the value-based pricing. Therefore, the comparison between two approaches of pricing is made - cost-based pricing and value-based pricing. The 'Price sensitively meter' is presented. The other topic of the paper is the perceived value - meaning of the perceived value, the components of perceived value, the determination of perceived value and the increasing of perceived value. In addition, the best company strategies in matrix 'value-cost' are outlined. .

  11. Marketable pollution permits with uncertainty and transaction costs

    International Nuclear Information System (INIS)

    Montero, Juan-Pablo

    1998-01-01

    Increasing interest in the use of marketable permits for pollution control has become evident in recent years. Concern regarding their performance still remains because empirical evidence has shown transaction costs and uncertainty to be significant in past and existing marketable permits programs. In this paper we develop theoretical and numerical models that include transaction costs and uncertainty (in trade approval) to show their effects on market performance (i.e., equilibrium price of permits and trading volume) and aggregate control costs. We also show that in the presence of transaction costs and uncertainty the initial allocation of permits may not be neutral in terms of efficiency. Furthermore, using a numerical model for a hypothetical NO x trading program in which participants have discrete control technology choices, we find that aggregate control costs and the equilibrium price of permits are sensitive to the initial allocation of permits, even for constant marginal transaction costs and certainty

  12. UTILITATEA ANALIZEI RELAŢIEI COST-VOLUM-PROFIT ÎN METODA DIRECT-COSTING PENTRU PROCESUL DECIZIONAL

    Directory of Open Access Journals (Sweden)

    Nelea CHIRILOV

    2016-12-01

    Full Text Available În acest articol este analizată relaţia cost-volum-profit în scopul optimizării profitului şi fundamentării unor decizii economice optime. Sunt prezentate studii de caz metodologice menite să evidenţieze necesitatea indicatorilor: pragul de rentabilitate, marja de contribuţie, rezerva stabilităţii financiare, volumul vânzărilor necesar obţinerii profitului dorit, preţul marginal. Rezultatele obţinute sunt prezentate şi analizate de autori. Articolul se încheie cu concluziile autorilor privind avantajele oferite de calculele şi analizele ce pot fi efectuate pe baza relaţiei cost-volum-profit în metoda direct-costing pentru procesul decizional.THE UTILITY OF ANALYZING COST-VOLUME-PROFIT RELATIONSHIP THROUGH THE DIRECT-COSTING METHOD FOR DECISION MAKING PROCESSIn this article it is analyzed the cost-volume-profit relationship with the aim of profit optimization and elaboration of optimum economic decisions. The statement also reflects methodological case studies which highlight the necessity of the following indicators: break-even point, contribution margin, reserve of financial stability, sales volume required for obtaining target profit, marginal price. The results are presented and are analyzed by authors. The article ends up with the conclusions of the authors with regards to advantages provided by the calculations and analysis which can be performed on the basis of cost-volume-profit relationship through the direct-costing method for decision making process.

  13. Understanding the cost bases of Space Shuttle pricing policies for commercial and foreign customers

    Science.gov (United States)

    Stone, Barbara A.

    1984-01-01

    The principles and underlying cost bases of the 1977 and 1982 Space Shuttle Reimbursement Policies are compared and contrasted. Out-of-pocket cost recovery has been chosen as the base of the price for the 1986-1988 time period. With this cost base, it is NASA's intent to recover the total cost of consumables and the launch and flight operations costs added by commercial and foreign customers over the 1986-1988 time period. Beyond 1988, NASA intends to return to its policy of full cost recovery.

  14. Transmission pricing in privately-owned electricity grids: An illustration from the Argentine electricity pool

    International Nuclear Information System (INIS)

    Abdala, Manuel A.

    2008-01-01

    The Argentine electricity reform of 1992 offers an interesting example of decentralized transmission pricing arrangements within a competitive system. This paper is a shortened version of an original analysis made in 1994 of the regulation of the Argentine transmission system, with emphasis on investment cost allocation rules. To make up for the limitation of short-run marginal cost (SRMC) pricing, incentives on service quality were put in place, including penalties for lack of line availability. The mechanism for capacity expansion, based on ad-hoc rules for allocations of investment costs, had the potential to produce non-optimal investment outcomes, as such rules ignored beneficiaries on the demand side. For fine tuning of this system, I proposed an alternative rule based on traditional welfare analysis that broadens the universe of identified beneficiaries, and thus can be expected to produce a fairer outcome on investment cost allocation, reducing the potential risks of non-optimal investment. A brief postscript comments on the paper from the perspective of 2007. (author)

  15. 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)

  16. Risk preference, option pricing and portfolio hedging with proportional transaction costs

    International Nuclear Information System (INIS)

    Wang, Xiao-Tian; Li, Zhe; Zhuang, Le

    2017-01-01

    Highlights: • Scaling is a key factor in option pricing. • The model is theoretically analyzed and the results are new. • Some numerical examples are performed. • The implied-volatility-frown is affected by the risk preference and scaling. - Abstract: This paper is concerned in the option pricing and portfolio hedging in a discrete time case with the proportional transaction costs. Through the Monte Carlo simulations it has been shown that the fractal scaling and risk preference of traders have an important influence on the hedging performances in both option pricing and portfolio hedging in a discrete time case. In addition, the relation between preference of traders and implied volatility frown is discussed. We conclude that the risk preferences of traders play an important role in determining the shape of the implied-volatility-frown and the different options having the different hedging frequencies is another reason for the implied volatility frown.

  17. Enhancing the comparability of costing methods: cross-country variability in the prices of non-traded inputs to health programmes

    Directory of Open Access Journals (Sweden)

    Evans David B

    2006-04-01

    Full Text Available Abstract Background National and international policy makers have been increasing their focus on developing strategies to enable poor countries achieve the millennium development goals. This requires information on the costs of different types of health interventions and the resources needed to scale them up, either singly or in combinations. Cost data also guides decisions about the most appropriate mix of interventions in different settings, in view of the increasing, but still limited, resources available to improve health. Many cost and cost-effectiveness studies include only the costs incurred at the point of delivery to beneficiaries, omitting those incurred at other levels of the system such as administration, media, training and overall management. The few studies that have measured them directly suggest that they can sometimes account for a substantial proportion of total costs, so that their omission can result in biased estimates of the resources needed to run a programme or the relative cost-effectiveness of different choices. However, prices of different inputs used in the production of health interventions can vary substantially within a country. Basing cost estimates on a single price observation runs the risk that the results are based on an outlier observation rather than the typical costs of the input. Methods We first explore the determinants of the observed variation in the prices of selected "non-traded" intermediate inputs to health programmes – printed matter and media advertising, and water and electricity – accounting for variation within and across countries. We then use the estimated relationship to impute average prices for countries where limited data are available with uncertainty intervals. Results Prices vary across countries with GDP per capita and a number of determinants of supply and demand. Media and printing were inelastic with respect to GDP per capita, with a positive correlation, while the utilities

  18. Determination of the fuel component in the cost price of the energy production in NPP

    International Nuclear Information System (INIS)

    Lakov, M.; Velev, V.

    1997-01-01

    An approach is proposed for the determination of the fuel component in the cost price of the nuclear units production with regards of the difference between the time of the fuel consumption and the energy production. This method gives the opportunity for fuel consumption prognostication, as well as an optimization of both short and long term fueling regimes. This approach permits current update of the economic conditions and the pre-history of the investments. It can be used both for the determination of the fuel component and the full cost price of the energy production in NPPs.(author)

  19. Penetapan Harga Jual dengan Cost Plus Pricing Menggunakan Pendekatan Full Costing pada Ud Gladys Bakery

    OpenAIRE

    Moray, Jessica Claudia; Saerang, David Paul Elia; Runtu, Treesje

    2014-01-01

    Setiap badan USAha didirikan pada prinsipnya bertujuan untuk mendapatkan laba, yang diperoleh dari kegiatan USAha dan dapat bersaing dalam pasar. Harga jual yang terlalu tinggi akan menjadikan produk kurang bersaing di pasar, sementara harga jual yang terlalu rendah tidak akan memberikan keuntungan bagi pengusaha. Tujuan penelitian ini adalah untuk mengetahui cara penetapan harga jual pada UD. Gladys Bakery dengan harga jual menurut metode cost plus pricing menggunakan pendekatan full costin...

  20. A Methodology for Determining the Marginal Cost Per Student at the Naval Postgraduate School

    National Research Council Canada - National Science Library

    Eckardt, John

    1997-01-01

    The overall objective of this thesis was to develop a flexible model to determine the marginal cost of graduate education per student for each of the various curricula at the Naval Postgraduate School (NPS...