Search results for "Externality"

Economic feasibility study for intensive and extensive wastewater treatment considering greenhouse gases emissions

2013

Economic feasibility assessments represent a key issue for selecting which wastewater treatment processes should be implemented. The few applications that exist focus on the positive economic value of externalities, overlooking the existence of negative externalities. However, wastewater treatment plants (WWTPs) consume a significant amount of energy, contributing to climate change. In this context, as a pioneering approach, greenhouse gas emissions (GHG) have been incorporated as a negative externality of wastewater treatment. Within this framework, this study aims to compare the economic feasibility of five technologies, both intensive and extensive, for small communities. The results sho…

Does the Spatial Weight Configuration Matter in the Determination of the Effects of Environmental Externalities on Housing Prices?

2012

This paper highlights, from both a theoretical and an empirical point of view, how the choice of neighborhood and spatial weight affects the direct and indirect effects of environmental housing attributes on house price in environmental hedonic models.An original empirical investigation is herein undertaken for the area of the lower Loire estuary (France), in order to illustrate and complement our theoretical analysis. The first thing it shows is that as the radius of the neighborhood increases, the spatial specification changes from the Spatial Durbin to the SLAG model, which could modify the MWTP of the environmental attribute and therefore affect welfare analysis. It shows also that the …

On Subsidies in Trade Agreements

2008

When terms of trade externalities are the only source of cross-border inefficiencies, trade negotiators must negotiate market access only. Based on this principle, Bagwell and Staiger (2006) argue against the WTO subsidy rules. The present paper shows that their argument fails when trade agreements are required to be self-enforceable. By affecting output, subsidies impact the self-enforcement constraints, which, in turn, determine the policies of trade agreements. Consequently, trade agreements must include subsidy rules. In realistic scenarios, banning production subsidies is efficient while negotiating market access only is inefficient. In this sense, this paper makes a strong case for th…

The Value of Local Externalities in Country-of-Origin Clusters: Evidence from China

2019

Business cooperation and the exchange of information and knowledge are actions and decisions that firms can build in order to compete more effectively in globalized markets. These options are even more relevant for SMEs to access and expand in new international markets and through more commitment entry modes as foreign direct investment (FDI). While studies on the role of local externalities are well established in the Economic Geography literature, its international dimension is still unexplored in deep. This is surprising when the survival and growth of the subsidiaries depends on the efficient adjustment with its context. The objective of this paper is to analyse the perceptions of the r…

Pension Schemes and Falling Birth-Rates: Change in Customs or Microeconomic Optimization?

2004

In this paper, we develop an overlapping generations model where fertility is endogenous. The utility of the parents is a function of the number of their children, and each child implies two types of fixed costs: the financial cost and the cost in terms of time. A "pay-as-you-go" pension scheme introduces an externality in that the number of children will be fewer than optimal because their favorable impact on the level of pension income is not taken into account. First, we define the competitive equilibrium dynamics and the steady state. This allows comparisons with the optimal stationary state, a notion which generalizes the golden rule. Two instruments, pensions and child benefits, are n…

Balance of payments crises and fiscal adjustment measures

1991

A model with optimizing firms and consumers is used to explore the effects of unannounced and preannounced fiscal adjustment policies that are intended to prevent an impending balance of payments crisis. It is shown that preannouncement unambiguously raises the required fiscal adjustment effort so that, from the government's point of view, “cold turkey” is the preferable policy. The effect of preannouncement on the private sector's adjustment cost is ambiguous since preannouncement induces an externality which may either benefit or harm the private sector, depending on the nature of the measure that is preannounced.

2019

Pre-industrial money supply typically consisted of multiple, often foreign currencies. Standard economic theory implies that this entails welfare loss due to transaction costs imposed by currency exchange. Through a study of novel data on Finnish nineteenth-century parish-level currency conditions, we show that individual currencies had principal areas of circulation, with extensive co-circulation restricted to the boundary regions in between. We show that trade networks, defined here through the regional co-movement of grain prices, proved crucial in determining the currency used. Market institutions and standard price mechanisms had an apparent role in the spread of different currencies a…

The impact of corruption on sport demand

2020

PurposeThe article presents an empirical analysis that evaluates the effects of a systemic corruption scandal on the demand in the short and the long run. In 2006, the Calciopoli scandal uncovered the match rigging in the Italian soccer first division. The exemplary sportive sanction of relegating the primary culprit to the second division imposed further negative externalities on the other clubs. Should we prefer the sportive sanction on the team or the monetary fines for the club?Design/methodology/approachWe estimated two log-linear models of the demand side (stadium attendance) using a fixed effect estimator, on two panel data set made of all the Italian soccer clubs in the first and se…

Optimal Sizing and Siting of Distributed Energy Resources Considering Public and Private Incentive Policies

2008

The present work presents the formulation and solution approach for the problem of optimal sizing and siting of distributed energy resources based on Photovoltaic, PV, technology. The considered system is an isolated grid (small island) and the parts involved are the utility and the customers. As it happens in islands, the same utility generates and delivers energy to customers, for this reason, the installation of dispersed generation units is beneficial for reducing power losses, regularizing the voltage profile, but also for increasing the profit. The problem is solved by means of the Non dominated sorting Genetic Algorithm II, NSGA-II, identifying the optimal size and location of PV sys…

Complementary Consumer Responsibility - The Limits to Immoral Delegation in Markets

2019

Delegation has been shown to facilitate individual immoral behavior. It is however unclear, if these findings extend to markets, where consumers may punish firms who delegate immoral production decisions. I address this question by employing an experimental market paradigm, involving an unfair product, containing a negative externality, and a fair product without externality. Passive delegation of the production decision, with random matching between an owner and a seller, leads to a lower share of the fair product being traded, consistent with the findings on responsibility diffusion. Active delegation in contrast, where owners have a choice over sellers first, increases the share of the f…