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Profit, Productivity, Price And Quality Performance Changes In The English And Welsh Water And Sewerage Companies, Alexandros Maziotis, David S. S. Saal, Emmanuel Thanassoulis
Profit, Productivity, Price And Quality Performance Changes In The English And Welsh Water And Sewerage Companies, Alexandros Maziotis, David S. S. Saal, Emmanuel Thanassoulis
Fondazione Eni Enrico Mattei Working Papers
The purpose of this paper is the evaluation of various profit drivers such as price changes, productivity changes and quality levels on the financial performance of the Water and Sewerage Companies (WaSCs) over time in the case when the number of observations is limited. We thereby follow Maziotis, Saal and Thanassoulis (2012) approach and extend it by measuring the impact of exogenous factors such as drinking water and sewerage treatment quality on profitability, productivity and price performance measures. The results suggest that while quality improvements have significantly contributed to the productivity performance of the WaSCs, they have also contributed negatively …
A Methodology To Propose The X-Factor In The Regulated English And Welsh Water And Sewerage Companies, Alexandros Maziotis, David S: Saal, Emmanuel Thanassoulis
A Methodology To Propose The X-Factor In The Regulated English And Welsh Water And Sewerage Companies, Alexandros Maziotis, David S: Saal, Emmanuel Thanassoulis
Fondazione Eni Enrico Mattei Working Papers
The purpose of this paper is to develop a methodology which can be used to set X-factor under price cap schemes, when the number of observations is limited. We firstly apply a panel index approach across Water and Sewerage companies (WaSCs) over time to decompose unit-specific index number based productivity growth as a function of the productivity growth achieved by benchmark firms, and the catch-up to the benchmark firm achieved by less productive firms. We then calculate the potential productivity catch-up of laggard firms and an estimate of how the top performing company improved its productivity over time (technical change). …
Profit, Productivity And Price Performance Changes In The English And Welsh Water And Sewerage Companies, Alexandros Maziotis, David S. Saal, Emmanuel Thanassoulis
Profit, Productivity And Price Performance Changes In The English And Welsh Water And Sewerage Companies, Alexandros Maziotis, David S. Saal, Emmanuel Thanassoulis
Fondazione Eni Enrico Mattei Working Papers
The purpose of this paper is to assess the impact of regulation in the financial performance of the Water and Sewerage companies (WaSCs) in England and Wales. We apply a panel index approach across WaSCs over time to decompose unit-specific (temporal) index number based profitability growth as a function of the profitability, productivity and price performance growth achieved by benchmark firms, and the catch-up to the benchmark firm achieved by less productive firms. The results indicated that the steady decline in average price performance, gains in productivity and relatively stable economic profitability after 2000, suggest that Ofwat is now more …
Output Quality And Sources Of Profit Change In The English And Welsh Water And Sewerage Companies, Alexandros Maziotis, David S. Saal, Emmanuel Thanassoulis
Output Quality And Sources Of Profit Change In The English And Welsh Water And Sewerage Companies, Alexandros Maziotis, David S. Saal, Emmanuel Thanassoulis
Fondazione Eni Enrico Mattei Working Papers
This paper investigates the determinants of profit change over the period 1991-2008 for the Water and Sewerage Companies (WaSCs) in the English and Welsh water and sewerage industry. We firstly apply an input oriented profit decomposition approach following the approach of De Witte & Saal (2010). Then, we make allowances for differences in the quality of output, by decomposing the output effect into high quality and low quality output effect. We decompose profit changes into various factors such as quantity and price effect, technical change, efficiency change, resource mix, product mix and scale effect, without and after controlling for quality. …
Interactions Between State And Federal Climate Change Policies, Lawrence H. Goulder, Robert N. Stavins
Interactions Between State And Federal Climate Change Policies, Lawrence H. Goulder, Robert N. Stavins
Fondazione Eni Enrico Mattei Working Papers
Federal action addressing climate change is likely to emerge either through new legislation or via the U.S. EPA’s authority under the Clean Air Act. The prospect of federal action raises important questions regarding the interconnections between federal efforts and state-level climate policy developments. In the presence of federal policies, to what extent will state efforts be cost-effective? How does the co-existence of state- and federal-level policies affect the ability of state efforts to achieve emissions reductions? This paper addresses these questions. We find that state-level policy in the presence of a federal policy can be beneficial or problematic, depending on …
Illiquidity And All Its Friends, Jean Tirole
Illiquidity And All Its Friends, Jean Tirole
Fondazione Eni Enrico Mattei Working Papers
The recent crisis was characterized by massive illiquidity. This paper reviews what we know and don't know about illiquidity and all its friends: market freezes, fire sales, contagion, and ultimately insolvencies and bailouts. It first explains why liquidity cannot easily be apprehended through a single statistics, and asks whether liquidity should be regulated given that a capital adequacy requirement is already in place. The paper then analyzes market breakdowns due to either adverse selection or shortages of financial muscle, and explains why such breakdowns are endogenous to balance sheet choices and to information acquisition. It then looks at what economics …
Do International Roaming Alliances Harm Consumers?, Benno Bühler
Do International Roaming Alliances Harm Consumers?, Benno Bühler
Fondazione Eni Enrico Mattei Working Papers
We develop a model of international roaming in which mobile network operators (MNOs) compete both on the wholesale market to sell roaming services to foreign operators and on the retail market for subscribers. The operators own a network infrastructure only in their home country. To allow their subscribers to place or receive calls abroad, they have to buy roaming services provided by foreign MNOs. We show that in absence of international alliances and capacity restrictions, competition between foreign operators would drive wholesale unit prices down to marginal costs. However, operators prefer to form international alliances in which members mutually provide …
On The Legitimacy Of Coercion For The Financing Of Public Goods, Felix Bierbrauer
On The Legitimacy Of Coercion For The Financing Of Public Goods, Felix Bierbrauer
Fondazione Eni Enrico Mattei Working Papers
The literature on public goods has shown that efficient outcomes are impossible if participation constraints have to be respected. This paper addresses the question whether they should be imposed. It asks under what conditions efficiency considerations justify that individuals are forced to pay for public goods that they do not value. It is shown that participation constraints are desirable if public goods are provided by a malevolent Leviathan. By contrast, with a Pigouvian planner, efficiency can be achieved. Finally, the paper studies the delegation of public goods provision to a profit-maximizing firm. This also makes participation constraints desirable.
On Regulation And Competition: Pros And Cons Of A Diversified Monopolist, Carlo Scarpa, Giacomo Calzolari
On Regulation And Competition: Pros And Cons Of A Diversified Monopolist, Carlo Scarpa, Giacomo Calzolari
Fondazione Eni Enrico Mattei Working Papers
We study the regulation of a firm which supplies a regulated service while also operating in a competitive, unregulated sector. If the firm conducts its activities in the two markets jointly, it enjoys economies of scope whose size is the firm’s private information, unknown either to the regulator or to the rival firms. We characterize the unregulated market outcome (with price and quantity competition) and optimal regulation that involves an informational externality to the competitors. Although joint conduct of the activities generates scope economies, it also entails private information, so that regulation is less efficient and the unregulated market too …
Accountability In Government And Regulatory Policies: Theory And Evidence, Carmine Guerriero
Accountability In Government And Regulatory Policies: Theory And Evidence, Carmine Guerriero
Fondazione Eni Enrico Mattei Working Papers
This paper analyzes the political economy of regulatory and judicial appointment rules. I study a model of price-setting by a political principal faced with a firm with unknown costs, and endowed with an information-gathering technology whose efficiency rises with the effort exerted by two accountable supervisors (a regulator and a judge). This set-up captures the institutions of several international markets. The model predicts that reforms toward election rather than appointment of regulators are more likely the less efficient is the information-gathering technology, the less stringent are the investment concerns of society, the stronger are regulators’ revolving-door motivations, and the closer …
Dependent Controllers And Regulation Policies: Theory And Evidence, Carmine Guerriero
Dependent Controllers And Regulation Policies: Theory And Evidence, Carmine Guerriero
Fondazione Eni Enrico Mattei Working Papers
This paper analyzes the effects of supervisors’ (i.e., regulators and judges) selection rules on regulated prices. A checks and balances’ regulatory review process strengthens the role of the judicial power and election increases the populism of implicitly motivated supervisors. Election arises when the risk related to expropriation of sunk investments and the inter-party distance are lower. Employing U.S. electric power market’s data, the empirical evidence strongly confirms these predictions. Indeed, when treated as endogenous, only the election of administrative law judges and not the one of regulators significantly lowers the level of electricity rates. Moreover a more effective supervision technology …