This paper examines the impact of a food contamination scare in the dairy sector on dairy exports. We investigate this question in the context of the 2013 Whey Protein Concentrate contamination incident in New Zealand. We assess the impact of this incident on dairy exports using synthetic control methods. A synthetic counterfactual scenario where the incident did not occur is developed using weighted information from other countries unaffected by the scare. We find that there was an initial negative shock to the exports of products that were thought to have been contaminated, but that there were no significant sustained impacts on other dairy products. The affected products made up only a small proportion of New Zealand dairy exports, with the vast majority of dairy exports being unaffected. Infant formula exports appear to have recovered more than a year after the scare. However, whey product exports (the contaminated product) remain lower than they otherwise would have been.
In many countries, current water-pricing policies are dictated by the sole objective of financial breaking even. This results in large withdrawals, which are not sustainable in the long run, hence not optimal. In this paper, we derive the optimal dynamic pricing policy, which targets efficient distribution while breaking even through a rebate scheme. Using data from Turkey, we estimate the demand for water by user groups. We carry out simulations to compare the effects of the current and optimal pricing policies on the frequency and severity of shortages. We find that, under the policy of break-even prices, the supplier runs into a shortage every 8 years. In contrast, if the prices were to set optimally, shortages would be practically nonexistent over the next century.
Auction models have proved to be attractive to structural econometricians who, since the late 1980s, have made substantial progress in identifying and estimating these rich game-theoretic models of bidder behavior. We provide a guide to the literature in which we contrast the various informational structures (paradigms) commonly assumed by researchers and uncover the evolution of the field. We highlight major contributions within each paradigm and benchmark modifications and extensions to these core models. Lastly, we discuss special topics that have received substantial attention among auction researchers in recent years, including auctions for multiple objects, auctions with risk averse bidders, testing between common and private value paradigms, unobserved auction-specific heterogeneity, and accounting for an unobserved number of bidders as well as endogenous entry.Keywords: auctions, structural econometrics. JEL Classification Numbers: C01, D44. * We were all students of Harry J. Paarsch and would like to express our sincere gratitude and appreciation to him. Harry was not only a pioneer of this literature, but he introduced each of us to the field and continues to inspire us today. We would also like to thank two anonymous referees for helpful suggestions. Any errors are our own.
[1] We consider the problem of water usage, developing a model to analyze the optimal pricing of water within a second-best economy. A benevolent supplier provides water to multiple user groups and chooses sectoral prices to maximize social welfare subject revenue and resource constraints. We first analyze the optimal pricing rule in a static setup, and examine when it is optimal to deviate from the inverse elasticity rule. Then, we investigate the effects of both revenue and resource constraints in the dynamic model. We find that it could be possible to for the supplier to charge a higher price to the more elastic demand, when water gets scarce.
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