Understanding the sensitivity of gasoline demand to changes in prices and income has important implications for policies related to climate change, optimal taxation and national security. The short-run price and income elasticities of gasoline demand in the United States during the 1970s and...

The wave of electricity market restructuring both within the United States and abroad has brought the issue of horizontal market power to the forefront of energy policy. Traditionally, estimation and prediction of market power has relied heavily on concentration measures. In this paper, we...

A low carbon fuel standard (LCFS) seeks to reduce greenhouse gas emissions by limiting a fuel producer's carbon emissions per unit of output. California has launched an LCFS for transportation fuels; others have called for a national LCFS. We show that this policy decreases production of...

Estimating market power is often complicated by a lack of reliable marginal cost data. A number of empirical studies identify industry competition and marginal cost levels by estimating the firms' first order condition within a conjectural variations framework. Few studies, however, have...

US Electricity and natural gas markets have traditionally been serviced by one of two market structures. In some markets, electricity and natural gas are sold by a regulated dual-product monopolist, while in other markets, electricity and natural gas are sold by separate regulated single-product...

For two years prior to the collapse of California's restructured electricity market, power traded in both a forward and a spot market for delivery at the same times and locations. Nonetheless, prices in the two markets often differed in significant and predictable ways. This apparent...

Incompatibility in markets with indirect network effects can reduce consumers’ willingness to pay if they value “mix and match” combinations of complementary network components. For integrated firms selling complementary components, incompatibility should also strengthen the demand-side...

Prior to the Telecommunications Act of 1996, many U.S. states restructured their regulatory framework by replacing rate-of-return regulation with competition in both the local exchange service and local long-distance markets and adopting price regulation (price caps and price freezes). Using a...

Renewable fuel standards, low carbon fuel standards, and ethanol subsidies are popular policies to incentivize ethanol production and reduce emissions from transportation. Compared to carbon trading, these policies lead to large shifts in agricultural activity and unexpected social costs. We...