Tariff Changes Research Articles

Changing Electricity Tariff—An Empirical Analysis Based on Commercial Customers’ Data from Poland

Nearly 60% of commercial customers are connected to a low-voltage network in Poland with a contractual capacity of more than 40 kW and are assigned a fixed tariff with flat prices for the whole year, no matter the usage volume. With smart meters, more data about how businesses use energy are becoming available to both energy providers and customers. This enables innovation in the structure and type of tariffs on offer in the energy market. Customers can explore their usage patterns to choose the most suitable tariff to benefit from lower prices and thus generate savings. In this paper, we analyzed whether customers’ electricity usage matched their optimal tariff and further investigated which of them could benefit or lose from switching the tariff based on the real dataset with the hourly energy readings of 1212 commercial entities in Poland recorded between 2016 and 2019. Three modelling approaches, i.e., the k-nearest neighbors, classification tree and random forest, were tested for optimal tariff classification, while for the benchmark, we used a simple approach, in which the tariff was proposed based on the customers’ previous electricity usage. The main findings from the research are threefold: (1) out of all the analyzed entities, on average, 76% of them could have benefited from the tariff switching, which suggests that customers may not be aware of the tariff change benefits, or they had chosen a tariff plan that was not tailored to them; (2) a random forest model offers a viable approach to accurate tariff classification; (3) the policy implication from the research is the need to increase the customers’ awareness about the tariffs and propose reliable tools for selecting the optimal tariff.

Does trade liberalization improve child health? Evidence from China

Positive child health is an important development indicator and is also a source of long-term economic growth. Whilst there has been previous research on the relationship between trade liberalization and child health, the conclusion is mixed and the underlying mechanisms remain limited. This paper estimates the effect of reductions in export tariffs on child health by taking advantage of exogenous changes in export tariffs on Chinese products since the reform and opening-up in 1978. We apply the Bartik approach and refer to China Health and Nutrition Survey data from 1993 to 2009, and find that export expansion causes a significant deterioration in child health, with the more obvious effects among relatively vulnerable families in rural areas, individuals with a low level of education, and girls. In addition, the mechanism analysis shows that export expansion increases the income and employment level of working-age parents. However, the income effect does not offset the negative impact of export expansion on parental care, the children being left behind, and child labor.

Princip srazmernosti premije težini rizika na primeru osiguranja od odgovornosti vlasnika motornih vozila – podzakonska aktivnost Narodne banke Srbije

Principle of the proportionality of the premium to the weight of the risk is one of the fundamental rules of insurance law. Having in mind the importance of the motor liability insurance for the national market of insurance as well as its compulsory character, supervisory body prescribes the sequence of steps which should be taken in order to change premium tariffs. Procedural order aims to make it easier for the supervisory body to convince itself of the justification of the tariff change. If it emerges from the submitted documentation that the insurance company is faced with an increase in the price of auto parts due to inflation, it is logical to increase tariffs. Author concludes that detailed standardization of the procedure for changing the premium tariff contributes to sustainable supervision in insurance and the protection of consumers of insurance services, which is an indispensable part of well-founded strategy of ESG.

Comparison of different taxation models on cross-border supply chain decisions: Considering disruption forecast and cost differences

In this paper, we consider disruption forecast and channel operating cost differences in a cross-border dual-channel supply chain and construct a dual-channel supply chain strategy game model under different taxation models. We compare the optimal pricing, order volume and profits of supply chain members under four strategies. We also analyze how the tariff rate and channel cost difference coefficient affect each member’s optimal decisions and profits. First, we find that under different taxation models, the impact of tariff rate on optimal order volume is different, but it always has a negative effect on optimal wholesale price. Second, in some threshold intervals of the channel cost difference coefficient, the size relation of optimal pricing is consistent with order volume under either taxation model, regardless of whether to wait for a disruption forecast. Finally, when the supply chain disruption probability and channel cost difference coefficient take different combinations, with the change in tariffs, the e-retailer and overseas manufacturer tend to adopt different strategies.

Pass-Through Effects of the East African Community Common External Tariffs on Kenya's Domestic Prices

This study offers an empirical microlevel analysis of the pass-through effects of the East African Community Common External Tariff on consumer prices in Kenya. Using data from the Kenya Integrated Household Budget Surveys conducted in 2005 and 2015, this research employs a fixed-effects model to estimate pass-through equations. The analysis focuses on consumer prices for agricultural and manufactured goods. It also considers household residential classifications, distinguishing between rural and urban areas, and it investigates the impact of border proximity and transportation costs on the pass-through effect. The findings show that manufactured goods have a significant pass-through effect. A 1% change in tariffs results in a 0.84% change in consumer prices for manufactured goods. However, the pass-through effects for agricultural goods were incomplete, suggesting that markets for manufactured goods are more competitive in Kenya. The study also found that pass-through effects vary depending on proximity to borders and the urban-rural divide.

Market Reaction to the Implementation of Coal Royalty Tariff Policy in Indonesia

The impact of government regulation on the mining industry is captivating to explore, specifically the newly reformed Coal Royalty Tariff. This present research captures the market's response to two tariff policy reforms, namely the Indonesian Government Regulation Number 25 of 2021 and Government Regulation Number 15 of 2022 building upon the semi-strong form market efficiency. T-Test analysis is used to test the hypothesis in which the abnormal returns from sample companies in the mining sector on the Indonesia Stock Exchange surround the enactment of government regulations. There is no abnormal return that occurred around the enactment of Government Regulation Number 25 of 2021, while the enactment of Government Regulation Number 15 of 2022 do generate abnormal return. Results imply a solid relationship between changes in risk and the investors’ expected future profitability as investors’ expectations are depicted in the stock price movements. This concludes that uncertainty following changes in government regulation constitutes an additional premium required by the investors. Our findings provide empirical evidence to the literature of semi-strong form market efficiency hypothesis (EMH) displaying that the market response to the implementation of changes in policies, especially the government should give proper attention to the issue of determining tariffs and investors should evaluate their required premium based on the impact of tariff changes.
 Keywords: Stock Price, Coal Mining, Government Policies, Royalty Rate

Flexibility for whom? Householder and stakeholder perspectives on justice regarding the introduction of dynamic grid tariffs in Norway

This paper presents the results from a qualitative research project in Norway on a forthcoming change in electricity grid tariffs. As a form of Demand Side Management to avoid capacity constraints in the grid, the new tariff seeks to reduce consumption peaks by incentivising householders to even out electricity use and shift to nighttime. We examine the perspectives of 13 representatives from grid companies as well as 22 householders and study the process of developing the tariffs, in which the researchers took part at certain times. We draw on previous studies on experts’ perceptions of end-users, social practice theory, and energy justice, and we employ the concept of flexibility capital to examine the situation of the participating households. The findings partly confirm results from previous studies showing that experts may have a simplistic view of end-users and by observing an unequal distribution of flexibility capital across the studied households. However, the study contributes to the field by observing a link between householders’ sentiments towards the new tariff and their respective levels of affluence and flexibility capital. Then, we explicitly address justice perspectives related to the tariff’s introduction as perceived by grid companies and householders and find that both groups voice a need to acknowledge the situation of different kinds of end-users. We discuss the results from an energy justice perspective and observe that details in the design of a DSM mechanism may dampen its negative effects.

Feasibility analysis of rates of PDAM, South Halmahera district, North Maluku based on full cost recovery

This study aims to conduct an analysis of the feasibility of PDAM tariffs in South Halmahera Regency based on full cost recovery. In 2018, the average water tariff per m3 was IDR 3,046.41, or 53.67% of the essential cost of water per m3 of IDR 5,676.60. Whereas for 2019, the average water tariff per m3 is IDR 3,112.35, or 52.02% of the crucial cost of water per m3 of IDR 5,982.96. In 2018 and 2019, the selling price of water was still below the basic price of water, so the applicable average tariff did not fully cover costs (full cost recovery). This happened because it used the 2006 water tariff. PDAM Halmahera Selatan Regency has never proposed a new tariff policy. It has yet to evaluate its tariff policy every year because it focuses on its social role in serving the community's water supply and expanding service coverage. PDAM has also never received operational assistance subsidies from the South Halmahera Regency Government.
 Public interest statements
 This study proposes tariff changes that can cover total costs (full cost recovery) for the Regent of South Halmahera Regency. If the tariff proposal is not approved, the PDAM should seek operational assistance subsidies to cover the full costs from the South Halmahera Regency Government. If the two efforts are unsuccessful, the PDAM must carry out cost efficiencies to reduce the high operating expenses.

CEO turnover, product market competition, and leverage policy

We study how CEO turnover, jointly with product market competition, affects firm leverage policy. About 18% of public nonfinancial US firms in Compustat experience significant switches in their long-term leverage policy every year. Without apparent changes in their operating fundamentals. We find that CEO turnover, especially external and forced turnover, explains shifts in long-term leverage policy. In addition, utilizing the product market fluidity measure and large import tariff changes, we find that, only when coinciding with intensified product market competition, external and forced CEO turnover is significantly and positively associated with the likelihood of firms leveraging up from zero to positive. Our evidence suggests that external and forced CEO turnover is an important vehicle for accomplishing changes in corporate policies necessitated by increases in product market competition.

How Exporters Grow

Abstract We use customs data for Irish firms to show that in successful episodes of export market entry, there are statistically and economically significant post-entry dynamics of quantities, but not of mark-ups. To match these moments, we structurally estimate a model where firms can invest in future customer base through two channels: by selling more today, and by spending on marketing and advertising. Our estimates suggest that customer base is insensitive to lagged sales, so firms have no incentive to engage in dynamic pricing to accumulate customers. Instead, investment in customer base through marketing and advertising explains the dynamics of quantities. The ratio of advertising and marketing expenditures to sales implied by the model is consistent with data from other sources. Our estimated model generates long-run export responses to permanent tariff changes that are bigger than short run responses, as well as responses that are increasing in the expected persistence of tariff shocks, contributing to our understanding of the International Elasticity Puzzle.

Renewable Hydrogen Energy Communities layouts towards off-grid operation

Solar hydrogen technology, i.e. producing green hydrogen by electrolysis fed by solar panels, is gaining attention as studies show it can compete with traditional electric batteries. Contemporary, the interest in the realization of Renewable Energy Community driven by the recent adoption in almost all the EU Countries of the RED II Directive is increasing. To match innovative technologies and new business models making the energy demand and the production closer in terms of time and space, the feasibility of Renewable Hydrogen Energy Community is explored. To determine the profitability of these solutions and size and operate the energy system, energy and economic analyses are needed as well as the optimization of its performance. A building complex with 180 kWp of PhotoVoltaics was studied using hourly real data on energy loads and production. Storage capacities ranging from 500 to 2000 kWh were simulated for hydrogen and electric battery options. The cost of investment and operation was also analyzed for the years 2020, 2030, and 2040 to evaluate changes in technology readiness level as well as accounting for the strong changes in electricity tariff due to the geopolitical issues effects on the market. The analysis was conducted using the DECAPLAN™ digital platform, which employs a mixed integer linear programming solver. Finally, the dispatch on hourly base has been compared for the same two months in 2019, 2020 and 2021 corresponding to pre, during and after pandemic restrictions.

A universal optimization framework for commercial building loads using DERs from utility tariff perspective with tariff change impacts analysis

To accommodate the changes in the nature and the pattern of electricity consumption with the available resources, utilities have introduced variety of tariffs over the years. This paper develops a comprehensive optimization framework that addresses the challenges associated with the diversity of utility tariffs for commercial loads. Optimization of commercial building net load through Battery Energy Storage System (BESS) and renewable energy resources is modeled and explored for minimizing billing cost for different tariffs. Cost functions are formulated for each possible commercial utility tariff type, engendering the universal cost function format. An algorithm is developed to apply the optimization model and generate the desired optimal outputs (e.g., optimal net load and BESS power, costs and savings, etc.). The results for several building loads and all tariff types are compared and analyzed to present the findings. An impacts analysis is performed to observe how different changes in tariffs affect the optimizations results. Results exhibit that for same building load and renewable generation, the tariff type can have an overwhelming impact on costs and savings. Tariffs without Time of Use (TOU) charges or peak demand charge components offer lower savings opportunity from BESS optimization. Price change sensitivities showed the complicated dynamics among TOU price components on savings and historical trend analysis as an effective tool to predict future savings. Tradeoff between energy and demand charge heavy tariff options are also discussed for user benefit. The recent change in TOU time periods presents limited desired benefits while the modified tariff proposed in this paper exhibit significant improvement in terms of utility operation.

ОЦЕНКА ПОТЕНЦИАЛА СОКРАЩЕНИЯ ПЕРЕКРЕСТНОГО СУБСИДИРОВАНИЯ ТАРИФОВ НА ПЕРЕДАЧУ ЭЛЕКТРОЭНЕРГИИ В РОССИИ

The article provides evaluation of probable reduction of cross subsidies in the electricity distribution industry taking into account limits of tariff burden for population. Estimations are based on ad hoc mathematic model and on 2021 year data, including detailed data of household budget survey (conducted by Rosstat). The article includes estimation of probable electricity tariff changes for population in case of cross subsidies cancellation and targeted subsidies establishment. Amount of required targeted subsidies is evaluated. Results of calculations show that full abolishment of cross subsidies will increase household electricity price by 48% or by 29% if targeted subsidies will take place. Therefore, cancellation of cross subsidization should be accompanied with improvement of power utilities’ efficiency and household energy efficiency.

Impacts of RPS and FIT on inter-regional power transmission line layout in China: Considerations of high renewable energy penetration

Given China's severely separated renewable energy (RE) supply area and load area, the power transmission capacity across regions restricts RE penetration and is directly affected by RE-related support policies. Thus, a multi-objective optimization model is developed to explore the impacts of changes in renewable portfolio standard (RPS) and feed-in tariff (FIT) policies on the optimal transmission line layout. The model regards the maximization of RE power grid-on and minimization of the total cost for the optimal line layout, transmission capacity, and technology selection. We found that power transmission in "West-to-East" and "North-to-South" is strengthened, with the capacity expected to expand 2.2 times between 2020 and 2040. 2024–2026 is the period with the most new lines. The new line grows when the RPS target increase. Compared with the business-as-usual scenario, in the two scenarios where RPS increased by 10% and 15%, the newly built lines' number could grow by 35% and 21%, respectively. On the contrary, if the FIT subsidy continues beyond 2020, the demand for new line construction may decrease, reducing 480 TWh (FIT2025) and 330 TWh (FIT2040) of RE power on-grid. Further, the penetration proportion of renewable generation could be 55.8%–61.8% in 2040, achieving high penetration of RE in China.

Development of chinese-brazilian agri-food trade

The article analyzes the Chinese-Brazilian trade in agri-food products. The importance and complementarity of bilateral trade flows are revealed; Brazil's growing inter- and intra-industry specialization in the supply of agricultural raw materials while maintaining a negative balance for the Chinese side. There was a significant lag between the net exporter and the importer in terms of the global food security index and the presence of a higher prevalence of malnutrition among the population. The decline in the already low share of agri-food products in total exports from China to Brazil is determined by the growth of domestic consumption of a variety of food products of domestic production and China's international specialization in the field of non-agricultural products with medium and high levels of added value. The main changes in tariff and non-tariff measures for regulating mutual trade have been identified. Emphasis is placed on the relationship between investment and trade policy of China, whose companies invest in the agro-industrial complex and infrastructure of Brazil in various forms, including international business mergers and acquisitions, construction from scratch, creation of joint ventures. The factors, risks and prospects of further development of the Sino-Brazilian agricultural trade are identified, taking into account the geopolitical effects of the possible substitution of large-scale purchases of soybeans from the United States with Brazilian supplies to China.

Leveraging hybrid probabilistic multi-objective evolutionary algorithm for dynamic tariff design

Dynamic tariffs play an important role in demand response, contributing to smoothing power consumption and reducing generation capacity requirement and carbon emission. However, in the existing works, tariffs are usually designed without comprehensive consideration, such as potential user responses to tariffs. Thus, assuming an electricity trading market contains a utility company and multiple residential users, a dynamic tariff design method is proposed in this paper, considering user responses to tariff changes. Leveraging the non-intrusive load monitoring technique, rated power and user preference features for each appliance are acquired by the utility company to quantify user comfort (discomfort) based on derived user appliance usage habits. Then, a bi-level Stackelberg game model is built on the supply side for designing optimal dynamic tariffs and imitating the influence of tariff changes on DR plans for users. The upper level represents the utility company, trying to maximize utility profit, social welfare and carbon emission reduction. While the lower level represents users, aiming to minimize electricity bills and user discomfort. By solving such an optimization problem with multiple objectives, a novel hybrid probabilistic multi-objective evolutionary algorithm balancing evolutionary efficiency and stability is applied where random forest is adopted to boost performance. The proposed model is benchmarked with two state-of-the-art pricing methods and validated on a publicly accessible REFIT dataset, where low-rate power measurements are collected from real houses in the UK. The experimental results show the proposed model generally outperforms benchmarks on dynamic tariff design in achieving peak-shaving and low carbon emission while preserving user satisfaction. Furthermore, a case study is implemented, which verifies the necessity of various objectives employed in the proposed method.

The Long and Short (Run) of Trade Elasticities

When countries change most favored nation (MFN) tariffs, partners that trade on MFN terms experience plausibly exogenous tariff changes. Using this variation, we estimate the trade elasticity at short and long horizons with local projections. We find that the elasticity of tariff-exclusive trade flows is −0.76 in the short run, and approximately −2 in the long run. Our long-run estimates are smaller than typical in the literature, and it takes 7 to10 years to converge to the long run, implying that (i) the welfare gains from trade are high and (ii) there are substantial convexities in the costs of adjusting exports. (JEL C51, F13, F14)

The use of Special-Order products in England between 2012 and 2020: An insight into the need for Point-of-Care manufacturing

Point-of-care manufacturing such as 3D printing has recently received significant attention from regulatory bodies and the pharmaceutical industry. However, little information is available on the quantity of the most prescribed patient-specific items, their dosage form, and why they were required to be dispensed. In England, ‘Specials’ are unlicensed medicines formulated to meet the requirements of a specific prescription, prescribed if no suitable licensed alternative exists. This work aims to quantify and examine trends in the prescribing of ‘Specials’ in England during 2012–2020, using the NHS Business Services Authority (NHSBSA) database. Quarterly prescription data from NHSBSA for the top 500 ‘Specials’ by quantity from 2012 to 2020 were compiled yearly. The changes in net ingredient cost, the number of items, British National Formulary (BNF) drug category, dosage form, and a potential reason for requiring a ‘Special’ were identified. In addition, the cost-per-unit was calculated for each category. The total spending on ‘Specials’ decreased by 62 % from £109.2 M in 2012 to £41.4 M in 2020, primarily due to a 55.1 % reduction in the number of ‘Specials’ items issued. The most frequently prescribed dosage form type of ‘Special’ was oral dosage forms (59.6 % of all items in 2020) particularly oral liquids. The most common reason for prescribing a ‘Special’ was an inappropriate dosage form (74 % of all ‘Specials’ in 2020). The total number of items dropped over the 8 years as commonly prescribed ‘Specials’ such as melatonin and cholecalciferol became licensed.In conclusion, the total spending on ‘Specials’ dropped from 2012 to 2020 primarily due to a reduction in the number of ‘Specials’ items issued and pricing changes in the Drug tariff. Based on the current demand for ‘special order’ products, these findings are instrumental for formulation scientists to identify ‘Special’ formulations to design the next generation of extemporaneous medicine to be produced at the point of care.

Structural Model for the Analysis of ‘The Impacts of Import Tariff Changes on Domestic Industrial Production’ in Nigeria

This study has investigated the ability of import tariff changes to match the relationship between import tariff changes and domestic industrial production in Nigeria. The study used a Static Computable General Equilibrium model of an archetype country to run simulations that indicate the nature of the static effects of import tariff changes on Nigeria. This study identifies four different scenarios to investigate the impacts of the changes in the import tariff rates on domestic industrial production in Nigeria. Scenarios try to get macroeconomic and welfare variables changes after the tariff rate changes compared to the base case scenario 2019 in which the benchmark equilibrium parameters are calibrated. The results shows that the growth of domestic industrial production have direct relationships with import tariff changes. That is, import tariff increase will provide increases in domestic industrial production. On the basis of our findings, this study recommends that, economic policies aiming to establish a level of import substitution seems to be more favourable in Nigeria, therefore, they should be encouraged. Also, a coordinated interplay of monetary and fiscal policies will be required to minimise contemporaneous distortions that arise from trade restrictions.

Implications of Import Tariff Changes on Household Welfare in Nigeria: A CGE Model Approach

This study investigated the effects of import tariff changes on the household welfare in Nigeria. Methodologically, the study used a static CGE model to run simulations that indicate the nature of the static effects. In the simulations, the study identifies four different scenarios to investigate the impacts of the changes in the import tariff rates. Scenario 1 & 2 focus on tariff rates reductions, whiles scenarios 3 & 4 test the effects of the increase in import tariff rates on household welfare and compared to the base case scenario 2019 in which the benchmark equilibrium parameters are calibrated. The results show that household income and consumption volume have inverse relationships with import tariff changes. The findings obtained from the model suggest that import tariff increase will provide rise in general price level. But household welfare should be a priority of government complementary policy help, therefore social protection policy should put in place for any upward rise of tariff rate.