Second-Best Congestion Pricing: The Case of an Untolled Alternative

This paper deals with second-best one-route congestion pricing in case of an untolled alternative. Using a two-link network simulation model, the effects of various demand and cost parameters on the relative efficiency of one-route tolling are analyzed. It is investigated whether the existence of costs of congestion charging may be a reason for one-route tolling to be more “overall efficient” than two-route tolling. Finally, the efficiency of revenue-maximizing one-route and two-route tolling is discussed.     

Forecasting the Malmquist productivity index

The Malmquist Productivity Index (MPI) suggests a convenient way of measuring the productivity change of a given unit between two consequent time periods. Until now, only a static approach for analyzing the MPI was available in the literature. However, this hides a potentially valuable information given by the evolution of productivity over time. In this paper, we introduce a dynamic procedure for forecasting the MPI. We compare several approaches and give credit to a method based on the assumption of circularity. Because the MPI is not circular, we present a new decomposition of the MPI, in which the time-varying indices are circular. Based on that decomposition, a new working dynamic forecasting procedure is proposed and illustrated. To construct prediction intervals of the MPI, we extend the bootstrap method in order to take into account potential serial correlation in the data. We illustrate all the new techniques described above by forecasting the productivity index of 17 OECD countries, constructed from their GDP, labor and capital stock.     

The frequency of visiting a doctor: Is the decision to go independent of the frequency?

In his analysis of the effects of the reform of the German healthcare system, Winkelmann (Journal of Applied Econometrics 2004; 19 : 455–472) investigates the number of doctor visits. He makes a distinction between the decision to go to a physician and the number of times the physician is visited in the observed time period. Winkelmann finds that there is no correlation between both decisions. This result appears to be far from straightforward since the primary driving force in both decisions will be the health of the patient. From this perspective a significant correlation is expected. In this paper, I first replicate part of Winkelmann's research. I then set out to analyse whether the zero correlation is actually true or comes from the way the relation between both decisions is modelled. My empirical analysis confirms the latter, but nevertheless also corroborates Winkelmann's main conclusions on the relevance of the explanatory variables used in his investigation. Copyright © 2011 John Wiley & Sons, Ltd.     

Dennis C. Rasmussen,The Infidel and the Professor: David Hume,Adam Smith,and the Friendship That Shaped Modern Thought

The Review of Austrian Economics -     

The distraction effect of non-audit services on audit quality

Regulators have expressed concerns that an emphasis on non-audit services (NAS) could distract from the audit function, even for clients with minimal NAS purchases. Motivated by this concern, we examine whether a greater emphasis on providing NAS to audit clients generally (i.e., not to a specific client) can distract from the audit function, thus reducing audit quality. We find evidence of an NAS distraction effect, where a greater emphasis on NAS at the audit office-level results in more client financial statement restatements, even after controlling for client-specific NAS. Further, the association exists among clients that purchase minimal NAS, suggesting that this association relates to distraction effects in addition to independence issues examined in prior research. This study should be of interest to audit firms, audit committees, and regulators because it provides new evidence regarding issues related to a business model that includes both audit and non-audit services.     

Carbon pricing under uncertainty

International Tax and Public Finance - Economists have adopted the Pigouvian approach to climate policy, which sets the carbon price to the social cost of carbon. We adjust this carbon price for...     

Transport energy futures: Exploring the geopolitical dimension

The future of road transport, being currently reliant on carbon-based liquid fuels, is largely unclear. Some advocate the necessity of single renewable energy paradigm, but its realization is potentially fraught with difficulty owing to technological challenges, existing sunk costs, and path dependencies associated with existing and emerging options. It could also result in disadvantageous outcomes to emerging economies. Another school of thought proposes that future road transport, even within single nations, will require multiple energy types, mainly because a single source will be insufficient to meet projected needs. A multiple paradigm has the potential to be expensive because several infrastructures have to be implemented simultaneously. This paper aims to assess both concepts by considering the largely neglected dimensions of resource location and regional geophysical attributes, in addition to national technical expertise, industry capacity and modal factors. Case studies from both the developed world (the European Union and Australia) and the developing world (sub-Saharan Africa and China) will assess the possibility of implementing a single transport energy paradigm versus a more pluralistic regime. The results will help to inform policy making and enable greater foresight with regard to making long-term transport infrastructure investment decisions.