Testing whether waterfowl hunting benefits increase with greater water deliveries to wetlands

The change in waterfowl hunting benefits due to an increase in water deliveries to the levels required for biologically optimal wildlife refuge management at California's San Joaquin Valley National Wildlife Refuges are estimated with the Travel Cost Method, using both ordinary least squares and Poisson count data estimators. To test whether these increases were statistically significant, the Krinsky and Robb technique was used to find confidence intervals around the consumer surplus point estimates. The increases in consumer surplus were found to be statistically significant in 5 of the 6 refuges based on OLS regression estimates and in all 6 refuges using Poisson count data regression estimates. In addition, a comparison of the marginal value of an acre-foot of water in consumptive recreational use versus agriculture use is made, with the finding that the marginal value of water in waterfowl hunting was greater than the marginal value of water in agriculture for one of the six refuges.     

THE IMPACT OF CIGARETTE ADVERTISING ON CONSUMER SURPLUS, PROFIT, AND SOCIAL WELFARE

This study estimates the effect of U.S. cigarette advertising on social welfare. Because economists hold different beliefs about the nature of advertising, the analysis uses three different empirical models to test the welfare implication of cigarette advertising. Each model employs estimates of a demand equation and a supply relation to calculate a single point estimate of the impact of advertising on profit, consumer surplus, and total surplus. Bootstrapping generates confidence intervals for each welfare estimate. The results indicate that the cigarette industry is not competitive and that advertising significantly increases market power. Further, advertising significantly reduces consumer surplus if it is either purely persuasive or purely informative but has no significant effect on total surplus.     

Supply function competition in a mixed electric power market

In this paper, we present a mixed oligopoly model where electric power generators compete in supply functions in a liberalized market. A former monopolist, the state‐owned generator, is assumed to be (partially) privatized. First, we obtain that there is a relationship between privatization and the number of electric power generators concerning the level of consumer surplus and total welfare. Indeed, a fully state‐owned generator is socially optimal, lowering private generators' profits and enhancing consumer surplus; that is, if the degree of privatization decreases, consumer surplus increases compensating the damage imposed on generators' profits. Second, as the number of generators increases, full privatization may provide similar levels of consumer surplus and social welfare than those observed in a mixed oligopoly. Moreover, it is also obtained that price‐cost margins increase as marginal cost increases. Overall, our results suggest that the state‐owned generator should be privatized when entry barriers are low enough, and competitiveness is enhanced. Otherwise, a state‐owned generator may protect consumers, enhancing consumer surplus.     

Non-market Value of Winter Outdoor Recreation in the Swiss Alps: The Case of Val Bedretto

A longstanding interest from environmental economists on winter outdoor recreation has overlooked activities practiced outside the boundaries of winter resorts—e.g. ski mountaineering. This paper implements the Travel Cost Method to estimate consumer surplus per season derived from ski mountaineering and snowshoeing in Val Bedretto—a valley located in the Swiss Alps. In addition, the Contingent Behavior Method is used to estimate the changes in welfare associated with the construction of an alpine center that would provide services aiming to reduce the risk of injury and death associated with winter outdoor recreation. The data is analyzed by means of latent class panel on-site count models. The latent class approach allows us to identify subpopulations that benefit from the alpine center. The results show that 33% of visitors would experience an increase in their consumer surplus per season equivalent to €31 per visitor.     

Endogenously chosen travel costs and the travel cost model: an application to mountain biking at Moab,Utah

The travel cost model is frequently used to estimate net willingness to pay for recreation at remote sites by using the visitor's travel costs as a proxy for the price of recreation. However, some concern has been raised over the validity of using the visitor's stated travel costs as a proxy for price. This paper addresses some of these concerns, by examining the possible over-estimation of consumer surplus due to endogenously chosen travel costs. This paper extends past theoretical work for the linear model by developing a correction for endogenously chosen travel costs in more commonly used nonlinear models such as the Poisson or count data model. Also provided is the first empirical test of the presence of endogeneity and an estimate of the magnitude of the error from ignoring endogeneity in travel costs. After applying this test and the correction to data that was gathered for mountain biking at Moab, Utah the estimate of consumer surplus falls from US $153 to US $135, which is a 12% reduction.     

The Relationship Between Output Growth and Unemployment: A Re-examination of Okun's Law in Australia

In this article, we investigate the questions of whether some form of Okun's Law holds for Australia, and if so whether the Okun relationship has been stable. The results indicate that alternative formulations of the ‘law’ do not give rise to numerically similar parameter estimates. Nevertheless, one of these formulations yields estimates which appear to be both plausible and consistent with results from previous analyses. This particular formulation suggests that Okun's relationship in Australia underwent a structural change around 1974. The parameter estimates obtained can be regarded as rules of thumb which may be useful in discussing broad consequences of policy actions.     

Quantity,quality and the welfare effects of US airline deregulation

In this paper we employ a method for estimationg quality-adjusted demand to calculate measures of the change in consumer suruplus due to US airline deregulation. The quality-adjusted estimates of the price elasticity of demand indicate that consumers are from 25% to 50% more sensitive to changes in air fares than unadjusted estimates would suggest. Changes in unadjusted consumer surplus overstate the net welfare gains from deregulation by roughly a factor of two, strongly suggesting that adjustments for quallity of service are essential to welfare analysis of regulatory changes in this industry     

Partial-Equilibrium Welfare Analysis

The use of partial equilibrium models is common, and, typically, efficiency is characterized by maximizing consumer plus producer surplus (or, sometimes, gross consumer surplus). The analysis appeals—implicitly or explicitly—to the concept of efficiency derived from general equilibrium models. Using the tax-reform methodology, it is shown in a simple general equilibrium model that, if the second-best outcome is not the first-best one, the sum of consumer plus producer surplus cannot lead an economy to its true second-best optimum.     

Valuing cultural world heritage sites: an application of the travel cost method to Mont-Saint-Michel

This article, using the zonal version of the travel cost method (ZTCM), provides the first economic valuation of recreational trips to Mont-Saint-Michel (MSM). The MSM was designated as United Nations Educational, Scientific and Cultural Organization World Heritage Site in 1979, and is the most visited coastal site in France. The potential effects on consumer surplus (CS) estimates of some aspects of the ZTCM are considered, namely the treatment of the multiple purpose/destination (MP/D) trips, the inclusion of the opportunity cost of time (OCT) in the recreation demand model and the heterogeneity in the preferences. The heterogeneity in the preferences is examined through a random parameters Poisson model (RPPM). The RPPM generalizes the standard Poisson model (SPM) by allowing coefficients of explanatory variables to vary randomly across geographical units rather than being fixed. Our results show that (1) substantial CS values are associated with the MSM; (2) excluding/ignoring MP/D trips result in biased CS estimates; (3) omitting OCT does not substantially bias CS estimates; (4) the RPPM provides richer information about the impact of explanatory variables on the demand for trips than the SPM, but (5) leads to statistically similar CS estimates than the SPM.     

封闭模型下稻米生产技术进步的福利效应分析

运用误差修正模型,估计我国稻米供给和需求弹性,在此基础上,采用Akino和Hayami提出的福利效应模型,具体测算我国稻米生产技术进步的福利效应并进行分解,基本结论为：稻米具有较低的供给弹性和需求弹性,稻米技术进步的福利效应表现为消费者剩余的增加和生产者剩余的减少,但消费者剩余的增加值远远大于生产者剩余的减少值,从而整个社会经济福利水平呈现上升趋势。     

The effects of rent asymmetries in experimental auction markets

We report the results of twelve ‘double-auction’ market experiments designed to analyze the effects of asymmetric induced supply and demand configurations on the price convergence path toward a competitive equilibrium. The proposition (convergence bias) that prices tend to approach the competitive equilibrium from above (below) when consumer surplus is greater (less) than producer surplus cannot be rejected. We do, however, reject the proposition (convergence symmetry) that these convergence biases are of equal absolute magnitude. Excesses of producer over consumer surplus are found to have a more pronounced effect on the sequence of contract prices.     

Welfare gain from quality and price development in the Japan’s LCD TV market

We estimate the welfare gain from innovations in the LCD TVs that prevailed during the period 2005–2007 in Japan, via consumer surplus that we measure with the aid of discrete choice methods, using market data obtained from an internet price comparison service (Kakaku.com). Further, by the measured implicit values of attributes, we evaluate in monetary terms, the qualitative transition embedded in the attributes through the iso-consumer surplus planes. We thereby disaggregate the welfare gain into the qualitative and the budgetary components, which we call the quality gain, and the budget gain, respectively. The estimates show, along with the evolved process of innovation, that the quality gain was in the order of 381 KJPY, while the budget gain was 94 KJPY negative, which gives about 287 KJPY of overall welfare gain per consumer, during the period.     

Consumers' Surplus As an Exact and Superlative Cardinal Welfare Indicator

This article shows that the Bennet-Bowley consumer surplus measure is an exact measure of Allais' disposable surplus if the consumer's utility function is of the translation-homothetic generalized quadratic form. The Bennet-Bowley consumer surplus measure, therefore, is a superlative cardinal welfare measure for the entire class of translation homothetic preferences. Because the exactness results in this article apply for cardinal welfare measures, they can be meaningfully aggregated across consumers to make aggregate welfare comparisons.     

How to eliminate the uncovered market: A duopoly model with government intervention

To eliminate poverty, government intervention is critical for addressing uncovered markets. To assess how this can be done effectively, this study constructs a two-firm model with government intervention. The study focuses on the preconditions, methods, and effects of different government intervention strategies. There are three main findings. (1) When consumer income levels fall below a certain threshold, an uncovered market segment is created, and government intervention should be introduced. (2) Government intervention strategies can be divided into subsidy-type, production-type and mixed-type, and each type achieves a different level of consumer surplus. Given a level of consumer surplus, the optimal strategy is affected by production costs. (3) For production-type and mixed-type intervention strategies, when the market is covered, lower intervention costs can achieve higher consumer surplus if government production costs are low. Furthermore, the optimal subsidy-type intervention strategy varies with the changes in product quality if relaxing the precondition of market coverage.     

Competition Between Networks: A Study of the Market for Yellow Pages

This paper estimates the importance of network effects in the market for Yellow Pages. I estimate three simultaneous equations: consumer demand for usage of a directory, advertiser demand for advertising and a publisher's first-order condition (derived from profit-maximizing behaviour). Estimation shows that advertisers value consumer usage and that consumers value advertising, implying a network effect. I find that internalizing network effects would significantly increase surplus. As an application, I consider whether the market benefits from monopoly (which takes advantage of network effects) or oligopoly (which reduces market power). I find that a more competitive market is preferable.     

Is real-time pricing smart for consumers?

Journal of Regulatory Economics - We examine the effects of real-time pricing on welfare and consumer surplus in electricity markets. We model consumers on real-time pricing who purchase...     

Efficiency and surplus bounds in Cournot competition

We derive bounds on the ratios of deadweight loss and consumer surplus to producer surplus under Cournot competition. To do so, we introduce a parameterization of the degree of curvature of market demand using the parallel concepts of ρ-concavity and ρ-convexity. The “more concave” is demand, the larger the share of producer surplus in overall surplus, the smaller is consumer surplus relative to producer surplus, and the lower the ratio of deadweight loss to producer surplus. Deadweight loss over total potential surplus is at first increasing with demand concavity, then eventually decreasing.     

COMPETITION CAN HARM CONSUMERS*

Duopolists selling differentiated products can generate less consumer surplus than a monopoly selling one of the products. In a Hotelling‐type model where a monopoly supplies more than half of potential consumers, but not all, entry by a rival leads to a duopoly price that is higher than the monopoly price. Consumers in aggregate will be made worse off by such entry when the effect of the price increase outweighs the benefit of extra variety. When consumers have continuous demand functions and firms use two‐part tariffs, duopoly can also result in lower aggregate consumer surplus than monopoly.     

License prices for financially constrained firms

It is often alleged that high auction prices inhibit service deployment. We investigate this claim under the extreme case of financially constrained bidders. If demand is just slightly elastic, auctions maximize consumer surplus if consumer surplus is a convex function of quantity (a common assumption), or if consumer surplus is concave and the proportion of expenditure spent on deployment is greater than one over the elasticity of demand. The latter condition appears to be true for most of the large telecom auctions in the US and Europe. Thus, even if high auction prices inhibit service deployment, auctions appear to be optimal from the consumers’ point of view.