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Regulators are often required to assess the extent of competition in a market, and to promote competition or to substitute for it. Interpreting competition as a perfectly competitive equilibrium has led regulators to over-regulate. Interpreting competition as a rivalrous discovery process calls for lighter handed regulation. Around the world, regulators including some airport regulators have been encouraging approaches such as negotiated settlement between regulated companies and their customers. The CAA's use of constructive engagement by London airports is another example. However, in many cases, regulators with a duty to promote competition have discouraged it by undue price controls. The CAA's recent price control review is a case in point, although the CAA mitigated the situation by deregulating Stansted and allowing an airport-proposed price undertaking at Gatwick. This raises the question of when regulators are needed. In order to regulate an airport, the Civil Aviation Act 2012 requires the CAA to show that the airport has market power, and that competition law would be insufficient to address this power, and that the benefits of sector regulation outweigh the adverse effects. This proved effective and could be considered for other regulated sectors. [ABSTRACT FROM AUTHOR]

Philippine agrarian reform involves compulsory purchase of private farmlands. Several landowners were suspected of either using land use conversions (LUCs) to pre-empt expropriation, or choosing market-led agrarian reform (MLAR) options to retain effective control of their farmland. However, there has been no statistically-tested empirical evidence to support anecdotal claims that these were adopted by landowners to protect private property rights. Before testing whether LUCs have been used solely to avoid land redistribution, this article provides a theoretical framework that treats the reform as a price intervention policy since compensation is usually below market value. This article's novelty lies in its application of Cheung's theory of price control to explain how land redistribution could change the use of productive asset through LUC, or the contractual arrangement of involved parties through MLAR. Afterwards, this study employs feasible generalized least squares regression, where the effect of compulsory land redistribution on MLAR and LUC are tested to investigate the hypothesis that LUC was largely induced by agrarian reform. The results show that some LUC and MLAR were induced by the risk of expropriation, although in the case of former only when the risk of expropriation is high. Based on Cheung's theory of price control, the response choice should depend on the transaction costs associated with each of the alternatives. The theoretical framework suggests that some landowners may have preferred MLAR first before considering LUC, which is posited as one reason why the proportion of expropriation-induced LUC may not have been as high as some might like to claim. • Theory of price control applied to response of landowner to a risk of expropriation. • Empirical study on how agrarian reform may affect land use change in Philippines. • Land use conversion was partly induced by high risk of compulsory acquisition. • But evidence that it was a reasonable market response was also found. • Preference for market-led redistribution may have tempered reform-induced LUC. [ABSTRACT FROM AUTHOR]

The behavior of bidders in simultaneous ascending auctions (SAA), which is a multiple unit auction and based on two principles, the principle of surplus maximization and principle of bid minimization is examined. The issue of early auction data to predict when such auction might end and value inferences is also investigated.

A study was conducted to explore how the introduction of habit preferences into the simple intertemporal consumption-based capital asset pricing model solves the equity premium and risk-free rate puzzles. The evidence suggested that the risk premia demanded by habit agents to hold risky securities depended on the payoffs of the securities that had high or low frequency volatility.

The effect of oil price shock on different industries was investigated using Vector Autoregression (VAR) model that included both macrovariables and industry-level variables. The study showed that both demand and supply of industries was affected by oil price shocks and the shock reduced the supply of oil-intensive industries and that among all industries the most severely affected by oil price shocks was automobile industry.

Abstract: This paper aims to examine the impacts of sectoral price control policies on oil price pass-through into China''s aggregate price level. To that end, we develop a partial transmission input–output model that captures the uniqueness of the Chinese market. We hypothesize and simulate price control, market factors and technology substitution – the three main factors that restrict the functioning of a price pass-through mechanism during oil-price shocks. Using the models of both China and the US, we separate the impact of price control from that of other factors leading to China''s price stickiness under oil-price shocks. The results show a sharp contrast between China and the US, with price control in China significantly preventing oil-price shocks from spreading into its domestic inflation, especially in the short term. However, in order to strengthen the economy''s resilience to oil-price shocks, the paper suggests a gradual relaxing of price control in China. [Copyright &y& Elsevier]

Abstract: Following de-regulation there has been considerable innovation in the airline market but aviation infrastructure services have adapted more slowly. Commercial approaches to infrastructure service provision can work effectively and there is scope for further application. State provision remains significant but governments find it challenging to ensure efficient and effective on-going service delivery. [Copyright &y& Elsevier]

Abstract: The phenomenon of protectionism in land policy has survived in the globalised age for various reasons. This case study on the destruction of racially discriminatory zoning in laissez-faire Colonial Hong Kong shows what could happen when protectionist measures are removed by the government. Approaching the reality of discrimination from economic theory of price controls, this paper argues, on the basis of the records of official speeches and writings and a small sample of post-war assignments for housing lots, that the pre-World War II segregation law was motivated more by economic protectionism in favour of Europeans rather than by any social stigma against non-Europeans or genuine environmental externalities generated by Chinese housing. The paper approaches the same phenomenon from a new perspective and with a better method. It was revealed that natural or contractual, as opposed to legal, agglomeration could happen even under written discriminatory laws that allowed a degree of inclusion for the ethnic group that suffered discrimination. This revelation was based on an examination of the ethnicity of the original owners and subsequent purchasers of all identifiable 627 housing lots on the Peak in Hong Kong for 115 years from 1876 to 1990, as found in the 421 relevant Crown Leases and 1255 assignments. These housing lots fell into 23 street neighbourhoods and could be classified by altitude. The key findings lend support to the arguments that even if the post-war colonial literature evaded or even distorted the subject, there was no true racial animosity between European and Chinese citizens because the exclusionary laws were driven by economic protectionist motives and the repeal of the laws was socially and economically beneficial for both Chinese and Europeans. [Copyright &y& Elsevier]

Abstract: Electricity regulators around the world make use of efficiency analysis (or benchmarking) to produce estimates of the likely amount of cost reduction which regulated electric utilities can achieve. This short paper examines the use of such efficiency estimates by the UK electricity regulator (Ofgem) within electricity distribution and transmission price reviews. It highlights the place of efficiency analysis within the calculation of X factors. We suggest a number of problems with the current approach and make suggestions for the future development of X factor setting. [Copyright &y& Elsevier]

This study examines a ceiling price for build-operate-transfer (BOT) road projects in the context of developing countries. Although ceiling price is one of the most significant elements in BOT policy given that it has a focal-point effect, it has been rarely examined in prior studies. Subsequently, the study formulates a model of ceiling price under the framework of simple two-route network by integrating the nature of travelers' mode choice with the interaction between stakeholders through the Nash equilibrium as well as a risk-mitigation approach in the ceiling price decision-making process. The proposed model has unique characteristics that allow the government to protect social welfare while still providing opportunities for private investors to achieve their optimal toll rates. It also provides room to the government for negotiating with private investors while taking into account travelers' benefits and risk identification. The model is applied to a case study in Hanoi, Vietnam; and successfully showed its applicability with empirical evidences. The proposed method highlights planning aspects rather than road users' aspect, which is expected to contribute to a project preparation stage in BOT projects. • Ceiling price of Build-Operate-Transfer road projects is analyzed with simple model. • Focal-point effect from regulated ceiling price is modeled in a two-route network. • The model employs a risk-mitigation approach in decision-making process. • The model also assumes the negotiation between government and private investors. • Workability of proposed model is demonstrated in a case study of Hanoi, Vietnam. [ABSTRACT FROM AUTHOR]

A study on the terms-of-trade impact on the 15 states of the former Soviet Union of trade transactions based on international prices reveals that raw material and energy exporters such as Russia, Turkmenistan and Kazakhstan will gain substantial advantages. However, countries such as the Baltic states, Belarus and Moldova who have primarily food and machinery exports will experience adverse consequences. Attempts to offset terms-of-trade loss by exploiting temporary monopoly power based on transportation network and supply linkages will adversely affect the supplying country in the long run.

In February 2017, India capped the retail price of coronary stents and restricted the channel margin to bring Percutaneous Transluminal Coronary Angioplasty (PTCA) procedure, which uses coronary stents, within reach of millions of patients who previously could not afford it. Prior research shows that care providers respond to such regulations in a way that compensates for their loss in profits because of price control. Therefore, price control policies often introduce unintended consequences, such as distortions in clinical decision making. We investigate such distortions through empirical analysis of claims data from a representative public insurance program in the Indian state of Karnataka. Our data comprises 25,769 insurance claims from 69 private and seven public hospitals from February 2016 to February 2018. The public insurance context is ideal for investigating distortions in clinical decisions as the price paid by patients, and thereby access to the treatment, does not change after price control. We find that the change in the average volume of PTCA procedures per hospital per month after price control disproportionately increased when compared to the change in the clinical alternative – Coronary Artery Bypass Graft (CABG) procedures. This increase corresponds to 6% of the average number of PTCA procedures and 28% of the average number of CABG procedures before the price control. In addition, disproportionate increase in PTCA procedures occurred only among private hospitals, indicating the possibility of profit-maximization intentions driving the clinical choices. Such clinical distortions can have negative implications for patient health outcomes in the long run. We discuss alternative policies to improve access and affordability to healthcare products and services which are likely to not suffer from similar distortions. • Piecemeal price controls could create unintended consequences and clinical distortions. • For access and affordability, nations should focus on alternatives like universal health insurance. • For optimal price controls, aligning of incentives of healthcare stakeholders is necessary. [ABSTRACT FROM AUTHOR]

Price ceilings are examined for a competitive market in which product quality is variable. Market clearing is accomplished by an equilibrium price. The equilibrium price rises because of the demand gap resulting from the ceiling.