Timothy P. Roth

Average and marginal price changes and the demand for electricity: an econometric study

The empirical literature on the demand for electricity has, hitherto, failed to adequately deal with increasing block pricing. While it is desirable, in principle, to include the entire price schedule in the demand function, the convention has been to include, as an argument, either an average or a marginal price. Yet use of either to the exclusion of the other one leads, inter alia, to biased estimates of own-price elasticity. With this in mind, a residential demand function is estimated employing both average and marginal price. While a number of interesting results emerge, it is significant that the coefficient on marginal price is ‘right’; that is, the expected inverse relationship between the quantity of electricity demanded and the marginal price it obtains. On the other hand, the positive sign on average price is troubling. Because average price is in this case exactly the same concept as the intra-marginal payment, a change in average price is exactly the same concept as a change in real income. T...

Efficiency: An inappropriate guide to structural transformation

Abstract This article argues that efficiency, and outcomes-based theory generally, is both theoretically flawed and inimical to the transition process. Utilitarian social welfare theory (SWT), the genesis of the efficiency standard, contemplates theoretical constructs that cannot meaningfully be defined. Moreover, the moral force of rights and correlative duties cannot be accommodated by SWT. Worse still, SWT can be employed to argue that corruption may actually improve efficiency. Granting all of this, I argue that the efficiency standard should not be employed to guide structural transformation. Rather, attention should center on an explicitly normative, constitutional approach that focuses less on consequences and more on procedures; an approach that emphasizes the importance both for economic growth/development and social interaction of ethical norms.

External Economies, Tax Receipts, and Pareto Optimality: the Case of Information

consumers (Stigler, 1961) and to business firms (Ames, 1961; Brandenburg and Stedry, 1966; Mansfield and Brandenburg, 1966; Nelson, 1~61; Roth, 1977). Of particular interest here is the fact that the tools of welfare economics and public goods theory have been brought to bear in assessing, inter alia, the value of information, both to the individual and to society. Some of this work has focused on the empirical determination of social returns to public information generation and dissemination (Hayami and Peterson, 1972; Griliches, 1958). On the other hand, some attention has centered on the problems attendant to the valuation of information under different decision environments, In an