Measuring the Dynamic Efficiency Costs of Regulators' Preferences: Municipal Water Utilities in the Arid West

Timmins, Christopher

doi:10.1111/1468-0262.00297

Cited by 76 publications

(52 citation statements)

References 26 publications

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“…This approach alleviates the curse of dimensionality that can arise in Nested Fixed Point Algorithm (NFXP) methods, which are typically used for single agent applications (Karlstrom, Palme and Svensson 2004;Rust 1987;Timmins 2003). 14 The intuition for the CCP 14 Since NFXP needs to solve the dynamic programming (DP) problem, the computational costs are often prohibitively high.…”

Section: Estimation Strategymentioning

confidence: 99%

The Dynamic Efficiency Costs of Common-Pool Resource Exploitation

Huang

Smith

2014

American Economic Review

102

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We conduct the first empirical investigation of common-pool resource users' dynamic and strategic behavior at the micro level using realworld data. Fishermen's strategies in a fully dynamic game account for latent resource dynamics and other players' actions, revealing the profit structure of the fishery. We compare the fishermen's actual and socially optimal exploitation paths under a time-specific vessel allocation policy and find a sizable dynamic externality. Individual fishermen respond to other users by exerting effort above the optimal level early in the season. Congestion is costly instantaneously but is beneficial in the long run because it partially offsets dynamic inefficiencies. JEL: C61 C73 Q22 Keywords: Dynamic efficiency costs, Open access, Dynamic games, Latent stock Common-pool resource exploitation-known popularly as the "Tragedy of the Commons" (Hardin 1968)-has attracted attention from numerous scholars. Despite considerable intellectual effort, 1 little is known empirically about the pathways through which the commons affects individual behavior and leads to inefficiency. Open access to resources, or at least minimal levels of excludability, can generate multiple inefficiencies.

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Section: Estimation Strategymentioning

confidence: 99%

The Dynamic Efficiency Costs of Common-Pool Resource Exploitation

Huang

Smith

2014

American Economic Review

102

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“…Timmins, 2002) as a weighted average of (net of payments) consumer surplus and profits: 11 This objective function yields a modified inverse elasticity rule for price setting by a government owned enterprise:…”

Section: Cross Checking the Estimated Magnitudesmentioning

confidence: 99%

E-ZTAX: Tax Salience and Tax Rates^*

Finkelstein¹

2009

Quarterly Journal of Economics

453

129

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This paper tests the hypothesis that the salience of a tax system affects equilibrium tax rates.To do this, I analyze how toll rates change after toll facilities adopt electronic toll collection. Unlike manual toll collection, in which the driver must hand over cash at the toll collection plaza, electronic toll collection automatically debits the toll amount as the car drives through the toll plaza, thereby plausibly decreasing the salience of the toll. I find robust evidence that toll rates increase following the adoption of electronic toll collection. My estimates suggest that, in steady state, toll rates are 20 to 40 percent higher than they would have been without electronic toll collection. Consistent with the hypothesis that decreased tax salience is responsible for the increase in toll rates, I also find evidence that the short run elasticity of driving with respect to the actual toll declines (in absolute value) following the adoption of electronic toll collection. I consider a variety of alternative explanations for these results and conclude that these are unlikely to be able to explain the findings.Key Words: tax salience; size of government; tolls, electronic toll collection JEL Classification Codes: H11, H71, R48 I am grateful to Daron Acemoglu, David Autor, Raj Chetty, Peter Diamond, Liran Einav, Mike Golosov, Erzo Luttmer, Sean Nicholson, Ben Olken, Jim Poterba, Nancy Rose, Stephen Ryan, Monica Singhal, and seminar participants at Cornell, MIT, Berkeley, and Stanford GSB for helpful comments, to Julia Galef for outstanding research assistance, and to the innumerable employees of toll operating authorities around the country who generously took the time to provide data and to answer my many questions 1

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“…Municipal water administrators are afraid to raise water prices (see Timmins 2002), and supplying water infrequently offers one mechanism for eliminating the excess demand caused while pricing below the market clearing level. These systems are particularly popular in the developing world where the political pressure to keep water prices low is strong.…”

Section: Discussionmentioning

confidence: 99%

The welfare costs of unreliable water service

Baisa

Davis

Salant

et al. 2010

Journal of Development Economics

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Throughout the developing world, many water distribution systems are unreliable. As a result, it becomes necessary for each household to store its own water as a hedge against this uncertainty. Since arrivals of water are not synchronized across households, serious distributional inefficiencies arise. We develop a model describing the optimal intertemporal depletion of each household's private water storage when it is uncertain when water will next arrive to replenish supplies. The model is calibrated using survey data from Mexico City, a city where many households store water in sealed rooftop tanks known as tinacos. The calibrated model is used to evaluate the potential welfare gains that would occur if alternative modes of water provision were implemented. We estimate that most of the potential distributional inefficiencies can be eliminated simply by making the frequency of deliveries the same across households which now face haphazard deliveries. This would require neither costly investments in infrastructure nor price increases.

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Measuring the Dynamic Efficiency Costs of Regulators' Preferences: Municipal Water Utilities in the Arid West

Cited by 76 publications

References 26 publications

The Dynamic Efficiency Costs of Common-Pool Resource Exploitation

The Dynamic Efficiency Costs of Common-Pool Resource Exploitation

E-ZTAX: Tax Salience and Tax Rates^*

The welfare costs of unreliable water service

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Measuring the Dynamic Efficiency Costs of Regulators' Preferences: Municipal Water Utilities in the Arid West

Cited by 76 publications

References 26 publications

The Dynamic Efficiency Costs of Common-Pool Resource Exploitation

The Dynamic Efficiency Costs of Common-Pool Resource Exploitation

E-ZTAX: Tax Salience and Tax Rates*

The welfare costs of unreliable water service

Contact Info

Product

Resources

About

E-ZTAX: Tax Salience and Tax Rates^*