Subsidization Policies Research Articles

04/00578 The energy subsidisation policies of Cyprus and their effect on renewable energy systems economics: Kalogirou, S. A. Renewable Energy, 2003, 28, (11), 1711–1728

The purpose of this paper is to develop a basic method of approximating identification in a function space having a Schauder decomposition. Consider the time dependent nonlinear systems x.(t)=A(t)x(t)+f(t,x(t);B(t)), x(0)=x0 and y(t)=hx(t)+e(t). Our estimation problem is to find time dependent parameters A(t) and B(t) in the function space c[0, 1] such that J(A,B)=∫01y(t)−hx(t;A,B)2dt12 is a mininum. It can be discretized to the problem: find A^n and B^n in the range of Pn such that JA^n,B^n is a minimum, where Pn is a Schauder decomposition for the function Space Z[0, 1] (Z[0, 1] contains C[0, 1]).The convergence of approximation is descussed. Let Z[0, 1] be a Banach space with a Schauder decomposition Pn, let (A^n,B^n) be a sequence of best approximation estimate. If (A^,B^) is the limit of (A^n,B^n) in Z[0, 1] Then xA^n,B^n−xA^,B^→0, J(A^,B^)=limn→∞J(A^n,B^n) and inf J(A,B)=JA^,B^. Finally numerical example of the problem is included.

Free/Open Source vs Closed Source Software: Public Policies in the Software Market

This paper analyzes the impact on social welfare of public policies supporting open source software (OSS). The focus of the paper is on desktop applications such as OpenOce and Linux for desktops. Desktop users can be divided between those who know about the existence of OSS, the “informed” adopters, and the “uninformed” ones; the presence of uniformed users leads to market failures that may justify government intervention. We study three policies: i) mandatory adoption, when government forces public agencies, schools and universities to adopt OSS, ii) information campaign, when the government informs the uninformed users about the existence and the characteristics of OSS, and iii) subsidization, when consumers are payed a subsidy when adopting OSS. We show that a part from subsidization policies, which have been proved to harm social surplus, supporting OSS through mandatory adoption and information campaign may have positive welfare eects. When software adoption is aected by strong net

The energy subsidisation policies of Cyprus and their effect on renewable energy systems economics

In this paper, the energy subsidisation policies that are in effect in Cyprus are investigated with respect to their effect on renewable energy systems economics. Two subsidisation policies are investigated, those of renewable energy and fuels. These are contradictory, as one is in favour and the other is against the exploitation of renewable energies on the island, which is the declared Government policy. First, the policy measures are described and their effect on the economic viability of a solar system is investigated by means of an example. This concerns a solar industrial process heat system for which four types of collectors are considered. From the results presented it is clear that renewable energy subsidies create a positive impulse on renewable energies whereas the economic factors improve considerably when the subsidy for fuel is removed, as the expenditure made for the erection of a solar system replaces a more expensive fuel.

Co-op advertising models in manufacturer–retailer supply chains: A game theory approach

In the literature of cooperative (co-op) advertising, the focus of research is on a relationship in which a manufacturer is the leader and retailers are followers. This relationship implies the dominance of the manufacturer over retailers. Recent market structure reviews have shown a shift of retailing power from manufacturers to retailers. Retailers have equal or even greater power than a manufacturer when it comes to retailing. Based on this new market phenomenon, we intend to explore the role of vertical co-op advertising efficiency with respect to transactions between a manufacturer and a retailer through brand name investments, local advertising expenditures, and sharing rules of advertising expenses. Three co-op advertising models are discussed which are based on two noncooperative games and one cooperative game. In a leader–follower noncooperative game, the manufacturer is assumed to be a leader who first specifies the brand name investment and the co-op subsidization policy. The retailer, as a follower, then decides on the local advertising level. In a noncooperative simultaneous move game, the manufacturer and the retailer are assumed to act simultaneously and independently. In a cooperative game, the system profit is maximized for every Pareto efficient co-op advertising scheme, but not for any other schemes. All Pareto efficient co-op advertising schemes are associated with a single local advertising level and a single brand name investment level, but with variable sharing policies of advertising expenses. The best Pareto efficient advertising scheme is obtained taking members' risk attitudes into account. Utilizing the Nash bargaining model, we discuss two situations that (a) both members are risk averse, and (b) both members are risk neutral. Our results are consistent with the bargaining literature.

Macroeconomic Policy and Ownership Structure in a Mixed Transition Economy

Both state and non-state sectors have important roles in the Chinese economy. A dynamic model to analyze capital accumulation in state and non-state sectors is constructed and the fiscal and monetary policy requirements for the coexistence of a state sector and a non-state sector are derived. Our findings suggest that the effects of fiscal and monetary policies on ownership structure depend on which government subsidization policy is implemented. The results indicate that lowering tax rates and tightening the money supply can speed up the transition pace, but these policies do not necessarily contribute to developing an economy with a greater share for the non-state sector.J. Comp. Econom., December 2000, 28(4), pp. 762–785. College of Economics, Osaka Prefecture University, 1-1, Gakuen-Cho, Sakai, Osaka 599-8531, Japan.

A procedure for estimating transit subsidization requirements for developing countries

The paper presents a procedure that has been developed for estimating subsidization requirements for urban transit services in developing countries. The procedure is based on a subsidization policy of reducing transport expenditure burden on the average commuter, by maintaining his transport expenditure-income ratio at a reasonable level. It is designed for both regulated and deregulated transport markets. It requires, as input, historical data (previous year) on fare, productivity, and load factor for the transport service or mode concerned, the transport expenditure-income ratio distribution of the commuters, and the current level of commuter personal transport allowance. It is based on the premise that transport expenditure-income ratio is inversely related to income. The subsidization formula developed in the paper yields a level of subsidy that is commensurate with the level of control a government is able to exercise over transit operations.

Targeted and Untargeted Subsidy Schemes: Evidence from Postdivestiture Efforts to Promote Universal Telephone Service

Normative economic analysis traditionally has pointed toward the merits of policies wherein prices reflect the economic cost of providing a good or service. Subsidization policies are, nevertheless, common in a variety of industries. Where such subsidies occur, economists have long advocated targeting those subsidy flows to maximize their effectiveness and minimizing the allocative inefficiency caused by financing of the subsidy. Despite the apparent consensus in economic thought on this subject, empirical evidence of the relative effectiveness of targeted versus untargeted subsidies to date has been lacking. In this article, we address this lacuna by examining a set of large‐scale targeted and untargeted subsidy flows that have developed side by side, each with the same nominal policy goal—promoting universal telephone service. Specifically, we test empirically the relative contributions of the alternative subsidy mechanisms in promoting the policy goal of maximizing subscription to the public switched telephone network. Our analysis indicates that targeted subsidy programs are considerably more effective than untargeted subsidies in promoting the goal of universal telephone service. Moreover, our results indicate that the financing mechanism used to generate subsidy flows may seriously erode the effectiveness of either targeted or untargeted subsidy policies.

Subsidisation policy: Little progress made in restructuring

Subsidisation policy: Little progress made in restructuring

Nonparametric analysis of technical, pure technical, and scale efficiencies for food crop production in East Java, Indonesia

Abstract Nonparametric analysis of technical efficiency for irrigated farms in the Madiun regency in the west-central part of East Java, Indonesia is conducted using linear programming techniques. This procedure allows the relative technical efficiency for each farm to be determined and for inefficiencies to be decomposed into pure technical inefficiency and scale inefficiency and does not require restrictions or assumptions regarding functional form to be placed on the data. Farmers in Madiun generally are efficient relative to each other. Farmers operating inefficiently do so more often because of scale inefficiencies rather than pure technical inefficiencies. A majority of the farms operate in the region of decreasing returns to scale rather than increasing returns to scale. Farmer age, the level of diversification of cropping activities, and high school education were found to be related to technical efficiency in the rainy season under irrigated conditions. Other socioeconomic factors were not statistically significant. The results imply that inefficient farms use excessive levels of inputs, particularly nitrogen fertilizer. This is perhaps due to the lingering effects of past input subsidization policies, particularly of fertilizers, in Indonesia, or to risk-reducing behavior. The results also imply that current government policies to encourage diversification of cropping practices in Java may lead to greater technical inefficiencies in production. In addition, extension education targeted to younger farmers with low levels of formal education would improve efficiency.

Nonparametric analysis of technical, pure technical, and scale efficiencies for food crop production in East Java, Indonesia

AbstractNonparametric analysis of technical efficiency for irrigated farms in the Madiun regency in the west‐central part of East Java, Indonesia is conducted using linear programming techniques. This procedure allows the relative technical efficiency for each farm to be determined and for inefficiencies to be decomposed into pure technical inefficiency and scale inefficiency and does not require restrictions or assumptions regarding functional form to be placed on the data.Farmers in Madiun generally are efficient relative to each other. Farmers operating inefficiently do so more often because of scale inefficiencies rather than pure technical inefficiencies. A majority of the farms operate in the region of decreasing returns to scale rather than increasing returns to scale. Farmer age, the level of diversification of cropping activities, and high school education were found to be related to technical efficiency in the rainy season under irrigated conditions. Other socioeconomic factors were not statistically significant.The results imply that inefficient farms use excessive levels of inputs, particularly nitrogen fertilizer. This is perhaps due to the lingering effects of past input subsidization policies, particularly of fertilizers, in Indonesia, or to risk‐reducing behavior. The results also imply that current government policies to encourage diversification of cropping practices in Java may lead to greater technical inefficiencies in production. In addition, extension education targeted to younger farmers with low levels of formal education would improve efficiency.

Household energy consumption in Beijing and Nanning, China

We present the findings of in-depth surveys of urban energy use carried out in Beijing and Nanning, China, in 1989–1990. After describing current household energy patterns by end-use activity and fuel type, we discuss the major supply, pricing and subsidization policies influencing household energy use trends in Nanning and Beijing. Recommendations for improving the supply and efficiency of energy use in China's urban households are presented as well.

German subsidisation policy in the wake of unification

German subsidisation policy in the wake of unification

Export Subsidies in India: Need for A Strategic Approach

The persisting trade imbalances, mounting external debt and its servicing burden, depleting foreign exchange reserves, etc., have often led to considering export promotion as a policy alternative for India. However, our continuing reliance on industrial market economies for exports underlines the importance of competition (imperfect) in product quality and price. The analytical re!lults of this paper show that if the underlying imperfect market structure of India's export trading is characterized by Cournot duopoly, the impact of export subsidies can be favourable in terms of larger market share for home exporting firms. This short-term advantage is mainly attributed to rent, or profit sharing of home firms initially earned by foreign firms in home market. These results offer strong economic support for the strategic export policy, yet to be formulated in India, or justification for the current export policy if only the subsidized exporting domestic firms behaviour is strategic, and provide the economic basis for empirical estimation of export earnings by a strategic export subsidization policy as compared to the existing nonstrategic policy.

Fertilizer and organic manure use under uncertainty: Policy comparisons for irrigated and dryland farming systems in South India

Fertilizer use decisions of farmers under uncertainty for various fertilizer policies are compared in terms of changes in cropping pattern, input use, sustainability and attitude towards risk for irrigated and dryland farming systems. Farm survey data collected from South Indian villages have been used with a mean variance framework to identify the risk aversion levels of farmers. The results of policy experiments show that organic manure is a marginally risk reducing input in both farming systems. Chemical fertilizers and organic manure are substituted for each other more in irrigated farming than in dryland farming. Organic manure is found to be a stochastic substitute for irrigation in irrigated farming. Relaxing the constraints on chemical fertilizers through subsidization policies enables farmers to invest in risky cash crops. It is argued that fertilizer policy recommendations should consider differences in farming systems and risk attitudes of farmers towards their input demand and output supply decisions and that such considerations would largely enhance the success of agricultural and price policies.

Wage subsidies as an anti-discrimination policy

Using the statistical theory of discrimination, we argue that initial wage offers may be lower for minority workers, but that wage differences for a given level of productivity should diminish with the worker's job tenure. If a wage subsidization policy is designed so that initial wage offers are equal for majority and minority workers and is maintained for a time period sufficient to demonstrate true productivity, then wage differences for a given level of productivity should disappear. We also provide an empirical test of the effectiveness of such a policy by using a sample of participants in a government job program that enforced equal wage schedules for White and Black workers. Our results show that measured discrimination declined among program participants, supporting the hypothesis that wage subsidies would be an effective anti-discrimination policy.

Producer Surplus and Subsidization of Pollution Control Device: A Non-Monotonic Relationship

Regulators have been concerned with the impact of environmental regulation on the profitability of regulated firms: there have been numerous grants and subsidy programs to reduce the cost of emission control equipment. Intuitively, there should be a monotonically increasing relationship between profits and the amount of subsidization. However, the author shows that this may not be so since regulation may establish a collusive outcome amongst oligopolistic competitors. The role of the subsidization policy may then be seen as the following: given Cournot players, the regulator may subsidize the emission control device to prevent the industry from reaching a profit superior outcome. Copyright 1990 by Blackwell Publishing Ltd.

REGIONAL DEVELOPMENT IN DEVELOPING NATIONS

The less developed regions of both developing and advanced nations face particular problems in bringing themselves into the mainstream of economic progress. The political realities are such that certain policies (e. g., infant industry tariffs) to spur growth open to developing nations are not open to the political subdivisions of the advanced nations or the developing nations.l However, it may be possible for the less developed regions of developing countries to profit by adapting the promotional techniques employed by the less developed regions in advanced nations. This is especially intriguing where the gains of one region do not necessarily imply losses to another national region, and thus regional gains constitute national gains. The purpose of this paper is to examine the industrial subsidization policies used by states and localities in the United States with a view to their adaptability to developing economies. Local interest in and support of industrialization has a long history and continues to be important in the development efforts made in the American South. This is well documented in the growth of the cotton textile industry in the South after the Civil War. The region, which was a raw material