Valuation of SGARAs IN THE Wine Industry: Time for Sober Reflection

The application of AASB 1037 Self Generating and Regenerating Assets provides little guidance to the commercial performance of winemakers. The valuation of grapevines essentially requires the valuation of a segment of a business (vineyards), from which is deducted the value of associated infrastructure. Grapevines are reported at a fictional "net market value" even though they cannot be bought or sold. The combination of recognising revaluation increments as distributable profits through the valuation of grapevines at "net market value", and the subsequent "amortisation" of those revaluation increments over the useful lives of the grapevines, creates a reporting maze which is more likely to confuse than inform.     

Ownership unbundling of natural gas transmission networks: empirical evidence

The European Commission has intensively examined the mandatory separation of natural gas transmission from production and services. However, economic theory is ambiguous on the price effects of vertical separation. In this paper, we empirically analyze the effect of ownership unbundling of gas transmission networks, considered to be the strongest form of vertical separation, on the level of end-user prices. Therefore, we apply different dynamic estimators such as system GMM and the bias-corrected least-squares dummy variable estimator to an unbalanced panel consisting of 18 EU countries over 19 years, allowing us to avoid the endogeneity problem and to estimate the long-run effects of regulation. We introduce a set of regulatory indicators as market entry regulation, ownership structure, vertical separation and market structure, as well as account for structural and economic country specifics. Among the different estimators, we consistently find that ownership unbundling has no impact on natural gas end-user prices, while the more modest legal unbundling reduces them significantly. Furthermore, third-party access, market structure and privatization show significant influence, with the latter leading to higher prices.     

Indonesian Politics in 2014: Democracy’s Close Call

Indonesian democracy experienced a near miss in 2014, when Jakarta governor Joko Widodo (Jokowi) defeated former general Prabowo Subianto by a margin of 6.3% in the presidential election. Both candidates were populists who rose to prominence in the context of public disillusionment with incumbent president Yudhoyono; Prabowo, however, condemned Indonesia's democratic system and promised to take Indonesia in a more authoritarian direction. We trace democracy's close call through five phases: the dying months of Yudhoyono's presidency, the rise of populist alternatives, the parliamentary elections of April 2014, the July presidential campaign, and the aftermath. We attribute the strength of Prabowo's campaign to superior organisational and financial support, while Jokowi's victory rested upon strong identification with him among poor and rural voters. Also determining the outcome was the fact that public satisfaction with democracy remained strong, undermining the effectiveness of Prabowo's authoritarian-populist message. Nevertheless, democracy's future remains uncertain, given that Prabowo and his supporters now control a sufficiently large number of parliamentary seats to continue promoting a rollback of democratic reforms.     

Determinants of consumer demand for circular economy products. A case for reuse and remanufacturing for sustainable development

We investigate determinants of consumer demand for circular (reused and remanufactured) products. Based on exploratory choice-based conjoint experiments with a sample of 800 adults in the United Kingdom, we examine two types of premium segment electronic appliances: a mobile phone and a robot vacuum cleaner. We find that consumers prefer partly circulated products over fully or not at all circulated products and that circular products can likely successfully enter the existing market at the retail price of a new product. Interestingly, circular products compete for market share primarily with new products, leaving the market share of second-hand options less affected. The results show a promising path for firms considering a transition to circular business models.     

Economic Implications of Further Harmonisation of Electronic Communications Regulation in the EU

There are some aspects of the European RFEC and its implementation today that could benefit from increased harmonisation; there are others in which substantial accommodation to local, national or regional circumstances and preferences is desirable or required.