Analysis of the optimal spatial distribution of natural gas under ‘transition from coal to gas’ in China

China has been attempting to realise green sustainable economic development. Thus, China has proposed and begun to implement the ‘switching from coal to gas’ policy to realise the energy structure transition but neglected to consider seasonal natural gas demand fluctuations, gas supply shortages, the backward gas transportation and storage infrastructure. This paper constructs a model of China’s natural gas distribution system by incorporating these four factors: ① supply factors including domestic natural gas fields, liquid natural gas receiving stations, internationally piped gas sources, ② demand factors including domestic regional demands, ③ real natural gas transportation pipeline systems in the country, and ④ the pricing mechanism of natural gas. Optimal spatial natural gas distribution with maximum social welfare under the three conditions are simulated, respectively: the ① fixed price system, ② market pricing mechanism, and ③ seasonal fluctuations. The simulation results indicate substantial changes would occur in China’s natural gas system during the switch from coal to gas, and the natural gas infrastructure requires further improvement. This paper also provides references for the natural gas storage facility location selection in China.     

Demand for Piped and Non-piped Water Supply Services: Evidence from Southwest Sri Lanka

In many countries water supply is a service that is seriously underpriced, especially for residential consumers. This has led to a call for setting cost recovery policies to ensure that the tariffs charged for water supply cover the full cost of service provision. Identification of factors driving piped and non-piped water demand is a necessary prerequisite for predicting how consumers will react to such price increases. Using cross-sectional data of 1,800 households from Southwest Sri Lanka, we estimate water demand functions for piped and non-piped households using appropriate econometric techniques. The (marginal) price elasticity is estimated at  − 0.15 for households exclusively relying on piped water, and at  − 0.37 for households using piped water but supplementing their supply with other water sources. The time cost elasticity for households relying on non-piped water only is estimated at  − 0.06 on average, but varying across sources. For both piped and non-piped households, we find evidence of substitutability between water from different sources. We discuss the implications of these results in terms of pricing policy.     

农户借贷行为及其福利效果分析

本文研究分析了农户借贷行为及其对收入和福利状况的影响。研究发现 :受教育年限、土地规模、非农收入、所在村庄的发展水平和同一村庄其他竞争农户的特征对特定农户的借款数额都具有显著的影响 ;此外 ,农产品的价格对农户借款数额也具有显著的影响 ,产粮区的农户获取借款的难度明显比其它地区的农户大得多 ;借款对农户纯收入和福利状况在统计上有很显著的影响。     

Consumer welfare effects of increased food and energy prices

In this study, the authors evaluated how much price changes in food and energy – two basic living expenditures competing for consumers’ budgets – would affect consumer welfare. We first estimated a US complete demand system to quantify the interdependent demand relationships among 11 categories of consumption expenditures. Among the estimates, the own price elasticities of both food and energy are relatively inelastic, a finding that explains the dynamics of the recent soaring food and energy prices. The estimated demand elasticities were then incorporated into the measurement of Hicksian compensating variation to analyse the consumer welfare effects of price changes in food and energy. The results indicated that an increase in food and energy prices would increase compensated expenditures or incur a substantial consumer welfare loss, creating an especially heavy burden for low income households.     

URBAN POVERTY IN CHINA AND ITS CONTRIBUTING FACTORS, 1986–2000

Food price increases and the introduction of radical social welfare and enterprise reforms during the 1990s generated significant changes in the lives of urban households in China. During this period urban poverty increased considerably. This paper uses household level data from 1986 to 2000 to examine what determines whether households fall below the poverty line over this period and investigates how the impact of these determinants has changed through time. We find that large households and households with more nonworking members are more likely to be poor, suggesting that perhaps the change from the old implicit price subsidies, based on household size, to an explicit income subsidy, based on employment, has worsened the position of large families. Further investigation into regional poverty variation indicates that over the 1986–93 period food price increases were also a major contributing factor. Between 1994 and 2000 the worsening of the economic situation of state sector employees contributed to the poverty increase.     

Dynamic general equilibrium model with uncertainty: Uncertainty regarding the future path of the economy

This paper develops a new method for incorporating uncertainty within a computable general equilibrium (CGE) model. The method involves incorporating uncertainty into the model by formulating different states of the world or paths that the economy may take. The risk then is that on one or more of the paths, there may be an external demand shock, for example, an exogenous shock in tourism demand. The multi-sector forward-looking CGE model with risk shows the impact of uncertainty on the economy and how households and industry respond to the presence of uncertainty. The results show that, where there is an asymmetric shock, the possibility of a future tourism demand shock creates a welfare loss. The welfare gains along the non-shocked path are a result of household's risk aversion and their substituting resources away from the shocked path. The difference in the monetary values of the welfare on the different paths can be interpreted as the ‘price’ of the risk. It is the price households would pay to remove the possibility of the tourism shock. Therefore, this research was able to quantify the monetary value of the risk. This method can be used in scenario modelling for other adverse contingent events, such as the uncertainty of climate change impacts, and agriculture production risks.     

Risk aversion and risk loving in the small: a decomposition of the multivariate risk premium

This note proposes a decomposition of the familiar scalar multivariate risk premium into components which can be easily interpreted in the context of consumer theory. The premium under consideration is the standard one used to ascertain the impact of price and income risk on consumer welfare. This proposed premium decomposition allows for a more intuitive identification of the detrimental and beneficial effects that arise from income and price risk. As an illustrative example, this decomposition is used to ascertain the welfare effects arising from the price fluctuations experienced by UK households over the period 1963–97.     

Optimal monetary policy in the presence of food price subsidies

Food price subsidies are a prevalent means by which fiscal authorities may counteract food price volatility in middle-income countries (MIC). We develop a DSGE model for a MIC that captures this key channel of a policy induced price smoothing mechanism that is different to, yet in parallel with, the classic Calvo price stickiness approach, which can have consequential effects for monetary policy. We then use the model to address how the joint fiscal and monetary policy responds to an increase in inflation driven by a food price shock can affect welfare. We show that, in the presence of credit constrained households and households with a significant share of food expenditures, a coordinated reaction of fiscal and monetary policies via subsidized price targeting can improve aggregate welfare. Subsidies smooth prices and consumption, especially for credit constrained households, which can consequently result in an interest rate reaction less intensely with subsidized price targeting compared with headline price targeting.     

Stabilization policy,infrastructure investment,and welfare in a small open economy

Using a two-sector neoclassical growth model in an open economy setting with heterogeneous agents, this paper studies the distributional effects and welfare implications of a joint monetary and fiscal policy response to public infrastructure expansion in emerging market economies. The results show that fiscal stabilization policy is critical for achieving fiscal sustainability and price stability. With joint support of monetary and fiscal policy, government infrastructure investment provides significant welfare gains to the economy, and the choice of fiscal instruments has major distributional effects across agents: saving households accrue the highest welfare gains with new bond issuance, while hand-to-mouth consumers are better off when non-distorting taxes are adjusted. These potential tradeoffs in welfare due to households’ differing responses to infrastructure expansion have important implications for policy making.     

增值税扩围改革的价格影响与福利效应

"十二五"规划建议明确将"扩大增值税征收范围,相应调减营业税等税收"作为下一步税制改革的重要内容。文章通过建立价格模型分析了不同的扩围方案对减少重复征税和降低产品税负的影响,并利用住户调查数据、投入产出方法和实际税收数据测算了增值税扩围改革的福利效应。研究发现,将增值税扩大到生产性服务业将改善居民福利,但具有累退性;全面扩围的福利改善作用小于生产性扩围,但具有累进性。     

农户土地租赁行为及其福利效果

本文根据2003—2009年817个样本农户的微观面板数据,首先运用Biprobit模型,识别出了农户租入和租出土地决策的影响因素,解决了以往文献所忽视的内生性问题和"遗漏问题";然后运用多重内生处理效应模型估计了土地租赁的福利影响,解决了不可观测的变量所导致的自选择性问题,结论表明只要是在自愿基础上所进行的租赁,无论是租出土地还是租入土地,都会增加农户效用,提高农户福利水平。     

Household composition,Engel curves and welfare comparisons between households: A duality approach

This paper is about household composition effects in consumer theory. These are important for the specification and estimation of Engel curves and demand functions. The models examined here have important applications in the areas of the measurement of cost of living indices, the study of poverty and inequality and in certain aspects of social policy. The models are based on the approach of Barten (1964). Taste differences between households are parameterized in a way which has been called simple good augmenting or simple repackaging in the literature on quality change. In this theory, changes in household composition play an analogous role to price changes. ‘True household equivalent scales’ are developed which are analogous to true cost of living indices and permit welfare comparisons across households.     

Tax,credit constraints,and the big costs of small inflation

This paper develops a heterogeneous‐agent overlapping generations model that examines how the neutrality of the tax system with respect to inflation depends on the price elasticity of the housing supply. The model, which endogenises house prices and rents, and which incorporates detailed tax regulations and bank‐imposed credit constraints, shows (a) inflation has large effects on the tenure arrangements of young households irrespective of the housing supply elasticity; and (b) inflation can improve the welfare of some low income young households if the supply is sufficiently elastic. The welfare costs of inflation are reduced by taxing real rather than nominal interest.     

Dynamic analysis of bribery firms’ environmental tax evasion in an emissions trading market

Using an R&D-based growth model with dual regulation, we analyse how environmental policies influence pollution, corruption, a growth rate, and welfare. Considering that polluting firms bribe bureaucrats to evade paying environmental tax, we find that a stricter environmental tax leads to a decrease in growth rate via a decrease in the permit rent as well as an increase in pollution and corruption per firm and results in worsening households’ welfare and in improving the bureaucrats’ welfare. Thus, tax evasion with corruption improves households’ welfare and worsens the bureaucrats’ welfare. Our findings imply that tax evasion under dual regulation improves social welfare.     

Welfare effects of pricing in anticipation of Laspeyres price-cap regulation: an example

A monopolist in a simple two-period model knows that a price cap will be imposed on a Laspeyres index of the firm's prices in the second period. (Tariff basket regulation is relevant to some UK utilities.) A simple example is developed to study the welfare changes that result from strategic weight manipulation by the firm as a consequence of its ability to adjust first-period revenue shares and interperiod price relatives. Uniform regulation requiring an equal percentage reduction in all of the regulated firm's prices provides a natural standard for comparison. One particular configuration of parameters induces identical pricing and welfare under the two forms of regulation in the example. Otherwise, compared with uniform regulation in the example, Laspeyres index regulation raises producer welfare but reduces consumer welfare in the first period and may also reduce consumer welfare in the second period. A numerical illustration shows that total welfare may also be lower under Laspeyres regulation.     

Greenhouse Gas Abatement Cost Curves of the Residential Heating Market: A Microeconomic Approach

In this paper, we develop a microeconomic approach to deduce greenhouse gas abatement cost curves of the residential heating sector. Our research is based on a system dynamics microsimulation of private households’ investment decisions for heating systems to the year 2030. By accounting for household-specific characteristics, we investigate the welfare costs of different abatement policies in terms of the compensating variation and the excess burden. We investigate two policies: (i) a carbon tax and (ii) subsidies on heating system investments. We deduce abatement cost curves for both policies by simulating welfare costs and greenhouse gas emissions to the year 2030. We find that (i) welfare-based abatement costs are generally higher than pure technical equipment costs; (ii) given utility maximizing households a carbon tax is the most welfare-efficient policy and; (iii) if households are not utility maximizing, a subsidy on investments may have lower marginal greenhouse gas abatement costs than a carbon tax.     

Relative Price Changes and Households' Welfare in Italy

The entrance of Italy in the Euro area in 2001 has given rise to a wide debate about the perception of inflation on households' well‐being. However, most of the debate has involved the measurement of the “correct” consumer price index at the national level. Much less analysis has been carried out on the distributional consequences of inflation on every household. The paper addresses this issue by performing a microsimulation analysis of the impact of inflation on Italian households in the period 1997–2007. It is shown that the impact of inflation has an ambiguous path over the period, with a large concentration of welfare losses around the introduction of the Euro currency. In particular, it is found that poorer and larger households are severely hurt by inflation and that the prices of gas and gasoline are largely responsible for determining the living conditions of Italian households.     

The impact of oil price changes on Spanish and euro area consumer price inflation

This paper assesses the impact of oil price changes on Spanish and euro area consumer price inflation. We find that the inflationary effect of oil price changes in both economies is limited, even though crude oil price fluctuations are a major driver of inflation variability. The impact on Spanish inflation is found to be somewhat higher than in the euro area. In both economies, direct effects have increased in the last decade, reflecting the higher expenditure share of households on refined oil products, whereas indirect and second-round effects seem to be losing importance.     

Price elasticities and tax reform in Mexico

Price responses are usually estimated for the average household. However, different households are unlikely to respond in a similar way to movement in prices. Consequently, relying on averages may be misleading when examining the behaviour of a particular group of households such as the poor. This article uses six household surveys collected in Mexico between 1989 and 2000 to derive price responses for 10 product groups and for five levels of income households. The estimated price elasticities are then fed into a micro simulation model to measure the effect of a marginal tax reform. The results find that that poorer households tend to react substantially more to movement in prices, suggesting the usefulness of estimating elasticities that reflect the behavioural responses of the poor rather than of the entire population. The micro simulation results indicate that reducing the taxes on maize, alcoholic beverages and vegetables would be both more equitable and more efficient in terms of social welfare. Meanwhile, a reduction in the tax on legumes, sugar, and oils and fats, while inefficient, would contribute to reduce inequality.     

A metric for assessing the “goodness” of income distributions and the effect of price changes

Social welfare evaluation depends in part on value judgments as to income distribution. This paper proposes a metric for assessing the “goodness” of particular income distributions. That metric is then used to examine the effect of price changes on the “goodness” of a given distribution. Consider an increase in the price of a commodity that is disproportionately consumed by households with incomes that are high relative to the preferred income distribution. One naturally supposes that such a price increase will make the given income distribution appear less bad. Surprisingly, this is not invariably the case.