Ex-post Analysis of Mobile Telecom Mergers: The Case of Austria and The Netherlands

Recently there has been an increased attention towards the ex-post evaluation of competition policy enforcement decisions and in particular merger decisions. In this paper we study the effects of two mobile telecommunication mergers on prices. We apply a standard difference-in-differences approach which is widely used in the literature on ex-post evaluation of mergers. For the Austrian T-Mobile/tele.ring merger, we conclude that after the acquisition (for which remedies were imposed) prices in Austria did not increase relative to the considered control countries. For the Dutch T-Mobile/Orange merger, we observe an increase in the mobile tariff prices in the Netherlands in the analysed period, relative to the control countries. We cannot firmly establish whether this price increase was exclusively caused by the T-Mobile/Orange merger or in part by possible price effects brought about by the KPN/Telfort merger consummated two years earlier in the Netherlands. However, we believe that such price increase could be linked to the structural changes brought by both KPN/Telfort and T-Mobile/Orange mergers together.     

Use of system dynamics modelling in design of an environmental restoration banking institution

This paper describes a system dynamics model developed to inform design of a proposed environmental restoration banking system. The purpose of the proposed system is to facilitate restoration of extensive areas of mangrove forests that have been cleared or damaged in large part by expansion of the commercial shrimp farming industry. A case study is developed for mangrove restoration in Thailand; however, the model is seen as applicable to a number of countries which have experienced severe mangrove loss. The scheme is based on environmental mitigation banking principles, in which users of an environmental resource are required to purchase from a mitigation bank credits representing restorations undertaken to compensate for environmental damage, thereby achieving “no net loss” of the environmental asset. The scheme proposed in this paper differs from usual mitigation banking practise in that the objective is to restore large degraded areas over and above present rates of consumption. Model simulations show that the restoration banking system may be effective in restoring coastal mangroves and in rehabilitating the coastal shrimp farming industry that is dependent on environmental services provided by the mangrove stock.     

Cost-effectiveness analysis of oxycodone with naloxone versus oxycodone alone for the management of moderate-to-severe pain in patients with opioid-induced constipation in Canada

Background:

Approximately 20–30% of Canadians suffer from chronic pain. Guidelines for the management of chronic pain support the use of controlled-release (CR) opioids to treat chronic pain. Although effective in managing chronic pain, oxycodone is associated with high rates of opioid-induced constipation (OIC). The cost-effectiveness of a combination of oxycodone for the management of pain and naloxone for the relief of OIC has not previously been evaluated for Canada.

Methods:

A decision analytic model was developed to estimate the cost-utility of combination oxycodone/naloxone compared to oxycodone alone in four populations. Drug costs for managing pain and healthcare costs related to managing OIC were included in the analysis and the primary measure of effectiveness was quality adjusted life years (QALYs) derived from OIC rates observed in clinical trials. The analysis was conducted from a healthcare system perspective, used a 1-year time horizon, and results were expressed in 2015 Canadian dollars.

Results:

In all four patient populations, there was a trade-off between slightly higher total expected costs for Targin treated patients compared to oxycodone treated patients, but also improved clinical benefits in terms of reduced OIC, which resulted in higher QALYs for patients. Although analgesic costs were found to be slightly higher for Targin treated patients, Targin also resulted in cost offsets to the healthcare system in terms of less rescue laxative drug use and other resources required for the management of OIC. The resulting 1-year cost-utility of Targin compared to oxycodone ranged from $2178–$7732 per QALY gained in the base case analysis, and it was found that these cost-utility results remained robust and at low values throughout a series of one-way deterministic analyses of uncertainty.

Conclusion:

The clinical effectiveness of oxycodone/naloxone in managing pain and OIC compared to CR oxycodone alone resulted in low cost-utility estimates.     

Non-linearities in Real Interest Rate Parity: Evidence from OECD and Asian Developing Economies

Abstract

This paper investigates the validity real interest rate parity (RIP) for a sample of 19 OECD and Asian developing economies. The distinction of this paper is that we exploit both linearity and non-linear unit root tests as advocated by Dufrénot et al. (Applied Economics, 38, pp. 203–229, 2006) to validate the parity. The major finding are: (i) the alignments from real interest rate differentials (RIDs) are corrected in a non-linear fashion and that the adjustments is asymmetric in both size and speed; (ii) that RIP holds for the developed and developing countries; and (iii) the empirical results are invariant with respect to the US, Japan or Germany as the centre country.     

Let’s Not Stick Together: Anticipation of Cartel and Merger Control in The Netherlands

Does enforcement action by the Netherlands Competition Authority (NMa) in the case of cartels and mergers produce an anticipatory effect? We use surveys among firms and their advisers to test whether merger plans that may fail to gain clearance from the NMa are not notified and whether the possibility of detection helps to reduce the number of cartels. Our results indicate that enforcement action by the NMa has a preventive effect. Surveys among companies show that 5 % of the notified mergers were modified before notification to forestall possible objections from the NMa. Moreover, for every 100 notifications of mergers there are 13 proposed mergers that are later on abandoned due to merger control. Companies also take account of the Competition Act when drafting contracts, conducting negotiations and holding meetings. Our survey among lawyers and other advisers shows that for every sanction decision taken by the NMa there are almost 5 cases in which, unbeknown to the NMa, a prohibited act has been terminated or modified in response to advice on competition law.     

EMU and the Lucas Critique

This paper attempts to provide a systematic review of the implications of EMU for the Lucas Critique. It asks how well cointegrating vector autoregressions estimated on pre-Euro data forecast post-Euro data, relative to their pre-Euro standard error. This is done for the Euro area as a whole, 3 countries that joined and 3 European countries that did not join. If the Lucas Critique is important, the forecasts should be much worse, because the policy change, EMU which changed exchange rate and interest rate determination processes, should have changed the parameters of the estimated models. The models appear to forecast very well and EMU does not appear to have induced structural change, indicating that the Lucas Critique does not seem to be important in this case.     

Pollution abatement and employment

Morgenstern et al. (J Environ Econ Manag 43:412–436, 2002. doi: 10.1006/jeem.2001.1191) are well-known for its investigation of the employment effects of environmental regulations. However, the cost function specified in that paper is handicapped by its reliance on survey data of the costs of inputs assigned to pollution abatement. In this paper, we specify an input distance function that models the joint production of good and bad outputs. This allows us to measure the relative importance of factors associated with changes in employment without pollution abatement cost data. We operationalize our model using a sample of 80 coal-fired electric power plants from 1995 to 2005.