The Impact of Regulation on Cost Efficiency: An Empirical Analysis of Wisconsin Water Utilities

The impact of regulation of efforts to minimize costs has been widely discussed, but remains difficult to measure. The sophisticated regulation of water utilities in Wisconsin allows us to attempt such on assessment since different firms can be under different regulatory regimes (price cap or rate-of-return) in the same geographical area at the same time. To measure the impact of regulation on efficiency, we use a stochastic cost frontier approach defining the unobservable efficiency of a water utility as a function of exogeneous variables. Using a panel of 211 water utilities observed from 1998 to 2000, we show that their efficiency scores can be partly explained by the regulatory framework.     

Heterogeneous Agents in Public Goods Experiments

We explore by purely experimental means a heterogeneous agents scenario in experimental public goods games, assuming the existence of at least three types of player: free riders, cooperators, and reciprocators. We identify the various types by means of four classification methods, and then play the public goods game with homogeneous groups. We observe that (eq1) the average contribution level is enhanced in this setting; (2) the decay phenomenon is replicated in groups of pure free riders, whereas in groups of cooperative and reciprocating players the contribution is high and fairly stable throughout the game.The experiments reported in this paper were financed by the Cognitive Science Laboratory and the Computational and Experimental Economics Laboratory of the University of Trento. We would like to thank Marco Tecilla, Macrina Marchesin and Dino Parisi for their help in running the experiments, and Luigi Mittone, director of CEEL, for letting us use the laboratorys resources. Paul Webley, Robert Moir, seminar participants at the Universities of Pisa and Trento, Charles Holt and two anonymous referees provided very useful comments on a previous draft.     

Teaching Bioeconomics

Bioeconomics is a relatively young field that uses an expanded microeconomics to examine animal behavior, human behavior, and animal and human social institutions. A voluminous literature is rapidly accumulating. There are as yet no standard textbooks, but there are several excellent books and/or articles that can be used in combination with videos and other aids to make a course that students will enjoy and that teachers can use to advance the frontiers of scholarship in economics and biology.*Invited editorial     

Is there Regional Tax Competition? Firm Level Evidence for Belgium

Summary This is the first paper that looks at regional tax competition within one single country. In many countries in Europe, regions within a country differ substantially in their economic development and attractiveness to firms. Belgium is a typical example of a country where the economic situation of its three regions is very different. Our findings are indicative of regional tax competition, with a lower Effective Tax Rate (ETR) in the peripheral region of Wallonia than in Flanders. In addition to location variables, our empirical model explaining firm level heterogeneity in ETRs includes firm characteristics, sector membership and variables capturing statutory tax breaks. We thank the Research Council of the Catholic University of Leuven for funding this research. A special thanks goes to Jozef Konings, Willem Buijink, Laurence van Lent, Wim Moesen, Christophe Croux and Frans Vanistendael, for providing useful feedback on this project. We also thank participants of a LICOS-K.U.Leuven seminar and a doctoral workshop at the Universities of Maastricht and Antwerp for useful comments.     

Will Corporate Income Taxation Survive?

Summary This paper explores the future of corporate income taxation, with special reference to the Netherlands. We review the empirical literature on a variety of distortions and arbitrage opportunities and pay due attention to effect sizes. An attempt is made to compare the size of various distortions in terms of the ex-post revenue impact of a corporate tax reduction. Thus, we learn which distortions impose the most serious threat to government revenue. This integrative approach allows us to understand recent developments in corporate tax regimes in the EU. Erasmus University Rotterdam, CPB, CESifo and Tinbergen Institute. Corresponding address: P.O. Box 1738, 3000 DR Rotterdam, e-mail: demooij@few.eur.nl. I thank Leon Bettendorf, Joeri I thank Leon Bettendorf, Joeri Gorter and Gerbert Romijn for their support and discussion in constructing Table 3 and Sijbren Cnossen and two anonymous referees for useful comments.     

Corporate Effective Tax Rates in the Netherlands

Summary This paper investigates the actual size of tax incentives granted to Dutch companies by using financial statement data for 1592 companies for the 1994--1999 period. Empirical results indicate that Dutch effective tax rates do not differ much from statutory tax rates. Although capital intensity is negatively associated with effective tax rates, only a small portion of the variance in effective tax rates can be explained. This indicates that the actual size of tax incentives granted to companies in the Netherlands is quite small.Comments by the editor, two anonymous reviewers, Willem Buijink, Yvonne Schols and participants at the annual European Accounting Association congress are gratefully acknowledged.