Environmental Economics
Mohammad Nabi Shahiki Tash; Mostafa khajehhasani; Morteza Yaqubi
Abstract
Monopoly and negative externalities are two aspects of market failure that affect the market performance. This study extends the Leibenstein approach, a framework to measure the market performance, which evaluates the social welfare costs of market power and environmental inefficiency. To assess the ...
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Monopoly and negative externalities are two aspects of market failure that affect the market performance. This study extends the Leibenstein approach, a framework to measure the market performance, which evaluates the social welfare costs of market power and environmental inefficiency. To assess the deadweight loss, we capture pollution impacts, on the market performance in an imperfect competition. In doing so, we assess marginal costs and price elasticity of demand by a Translog function, market power by Herfindahl-Hirschman and Lerner indices, and environmental inefficiency by directional distance functions, at a Cournot competition for Iran’s energy-intensive industries at the four-digit ISIC level. Our results demonstrate that the social welfare costs of welfare triangle and economic rent are negligible and include a small amount of welfare costs. Non-ferrous foundry imposes the lowest social cost (1.03% of its production value), and cement, lime and gypsum industries impose the highest social cost (50.7% of their production value). Those industries with more market power pay less attention to the environment. In polluting industries, welfare loss, due to market power, is relatively negligible. However, relatively high cost of social welfare, due to environmental inefficiency, indicates the necessity of levying a green tax to reduce the adverse effects.
Marjan Radnia; Mosayeb Pahlavani; Mohammad Nabi Shaihaki Tash; Reza Roshan
Abstract
In this paper it has been attempted to investigate the capability of the consumption-based capital asset pricing model (CCAPM), using the general method of moment (GMM), with regard to the Epstien-zin recursive preferences model for Iran's capital market. Generally speaking, recursive utility permits ...
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In this paper it has been attempted to investigate the capability of the consumption-based capital asset pricing model (CCAPM), using the general method of moment (GMM), with regard to the Epstien-zin recursive preferences model for Iran's capital market. Generally speaking, recursive utility permits disentangling of the two psychologically separate concepts of risk aversion and elasticity of intertemporal substitution which are constrained to be equal to the inverse of each other for the traditional time-additive utility functions. Rather than using the stock market as a proxy for wealth, we constructed a more comprehensive return which is the weighted average of stock index return, labor wage growth (as a proxy for human capital return), housing return and deposit return. The empirical results demonstrate that the signs of the coefficient of the relative risk aversion and the intertemporal elasticity of substitution are the same, which means that investors have homogeneous attitudes toward the risk across the states of nature and the risk over time in Iran but different ones in their values. Therefore, the assumption that the relative risk aversion is equal to the reciprocal of the elasticity of substitution is not valid in Iran's stock market.
Forough Jahantigh; Mohammad Nabi Shahiki Tash; Mosayeb Pahlavani
Abstract
The main objective of this research is to evaluate the social costs of monopoly in Iranian concentrated industries during 1996-2006. Leibenstein approach has been employed to evaluate the social costs. Leibenstein believed that most monopolistic industries operate inefficiently because of being in the ...
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The main objective of this research is to evaluate the social costs of monopoly in Iranian concentrated industries during 1996-2006. Leibenstein approach has been employed to evaluate the social costs. Leibenstein believed that most monopolistic industries operate inefficiently because of being in the safe margin. Hence, he proposed that the costs of inefficiency be added to the welfare triangle. Results show that "manufacture of tobacco products, recycling, mnufacture of medical, precision and optical instruments, watches and clocks, manufacture of coke, refined petroleum products and nuclear fuel, manufacture of fabricated metal products, except machinery and equipment " have imposed the most social cost on the society due to their inefficiency and deadweight loss of the welfare triangle. The social cost that these industries imposed on the society is equal to 100.47, 54.701, 41.039, 39.509 and 31.241 percent of the sales, respectively. In other words, a social cost of 24.01 percent of the sales is imposed on consumers in Iran by the concentrated industries.
Mohammad Nabi Shahiki Tash; Forough Jahantigh
Abstract
This paper studies the effects of the structural variables of the Iranian industries sector on the welfare cost using to the Structure-Conduct-Performance (SCP) theory. In other words, we investigate the role of structural components and their effects on the size of the welfare cost in Iran's industry ...
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This paper studies the effects of the structural variables of the Iranian industries sector on the welfare cost using to the Structure-Conduct-Performance (SCP) theory. In other words, we investigate the role of structural components and their effects on the size of the welfare cost in Iran's industry sector. We have used the Leibenstein's model to calculate the deadweight loss and then the panel data model has been used to quantify the model. Leibenstein believed that in many cases the monopolistic industries operate inefficiently due to being on the margin of safety. So in addition to the welfare triangle, the costs of the inefficiency of monopolistic industries should be also considered as the welfare cost. Our results demonstrate that there is a direct relationship between the welfare cost and all of the parameters of the model (barriers to entry, market concentration, economies of scale, state ownership share and firm size).