Property Prices and Exposure to Multiple Noise Sources: Hedonic Regression with Road and Railway Noise

This study examines the effect of road and railway noise on property prices. It uses the hedonic regression technique on a Swedish data set that contains information about both road and railway noise for each property, and finds that road noise has a larger negative impact on the property prices than railway noise. This is in line with the evidence from the acoustical literature which has shown that individuals are more disturbed by road than railway noise, but contradicts recent results from a hedonic study on data of the United Kingdom

Provoking Insurgency in a Federal State: Theory and Application to India

This paper presents a model of provocation in a federation, where the local government triggers an insurgency with a view to acquire the control of some economic assets with the help of the central government. Some econometric support for this model is found using data on the Naxalite conflict that affects eight states of India. The tests performed control for endogeneity of the local government’s police force interventions. They suggest that the latter are meant to amplify the violent activity of the insurgents, with a view to lure the central government to intervene and to help clear the ground for exploiting mineral deposits lying under the land of tribal people

Liquid Bundles

The paper revisits and qualifies existing insights on security design. A rich literature argues that tranching creates debt-like instruments that are robust to adverse selection or discourage wasteful information acquisition. Yet, for a given information structure, while tranching confines and liquefies the safe part of a cash flow (the insulation effect), bundling makes the risky part more liquid (the trading adjuvant effect). Moreover, tranching always has adverse welfare effects on information acquisition: It encourages (discourages) information acquisition when it should be deterred (encouraged). The paper provides conditions under which tranching reduces welfare even when the insulation effect dominates the trading adjuvant effect. The paper’s second contribution is to analyze the velocity of assets that are repeatedly traded. The dynamic model can be nested into the static one and insights are shown to be closely related to those on tranching. The central insight is that liquidity is self-fulfilling: A perception of future illiquidity creates current illiquidity

The risk-Shifting Hypothesis : Evidence from Subprime Originations

Using loan level data, we provide evidence consistent with risk-shifting in the lending behavior of a large subprime mortgage originator { New Century Financial Corporation { starting in 2004. This change follows the monetary policy tightening implemented by the Fed in the spring of 2004, which resulted in an adverse shock to the large portfolio of loans New Century was holding for investment. New Century reacted to this shock by massively resorting to deferred amortization loan contracts (\interest-only" loans). We show that these loans were not only riskier, but also that their returns were by design more sensitive to real estate prices than standard contracts. New Century was thus financing projects with a high beta on its own survival, as predicted by a standard model of portfolio selection in financial distress. Our findings shed new light on the relationship between monetary policy and risk taking by financial institutions. They also contribute to better characterizing the type of risk taken by financially distressed firms

Pricing of Transport Networks, Redistribution and Optimal Taxation

We study optimal pricing of roads and public transport in presence of nonlinear in- come taxation. Individuals are heterogeneous in unobservable earning ability. Optimal transport tarifs depend on time costs of travel and work schedule adjustments (days and hours worked per day) as a response to commuting costs. We find that discounts for low income individuals are optimal only if the time cost of a trip is small enough. Lower travel time costs facilitate screening: therefore, redistribution provides an additional motive for congestion pricing. Finally, we investigate the desirability of means-testing of transport tarifs

Costs and prices in electricity transport

Cette thèse est composée de quatre chapitres sur l’économie du transport et de la distribution d’électricité. Le premier chapitre est une introduction générale sur le secteur de l’électricité et sur la distribution d’électricité en France et en Europe. Le chapitre 2 propose une analyse économique de la tarification d’accès à un réseau de distribution lorsque l’opérateur du réseau tient compte de la dispersion spatiale des utilisateurs potentiels. Nous différencions notamment les coûts affectés par la dispersion géographique de ceux communs à l’ensemble des utilisateurs connectés. Ce chapitre met en avant l’effet des contraintes de service public sur l’investissement permettant d’améliorer la qualité du réseau, la taille de celui-ci et le tarif de connexion. Le troisième chapitre soulève le problème de la gestion des pertes en ligne et analyse comment les différents modes de gestion peuvent inciter les distributeurs à améliorer l’efficacité du réseau. Dans un premier temps, nous considérons un modèle 1-ligne/2-nœuds afin de montrer l’importance des pertes en ligne sur l’ordre de mérite. Nous comparons ensuite les deux modes de gestion des pertes présents en Europe et leur impact sur le niveau d’investissement permettant de réduire les pertes en réseau. Le dernier chapitre analyse l’impact des tarifs de soutien aux énergies renouvelables dans un contexte d’économie ouverte et étudie l’incidence des contraintes de transmission sur les échanges d’énergie. Nous considérons deux sources d’énergie renouvelable et non-renouvelable, présentes dans chacun des deux pays. Nous supposons que la production d’électricité grâce aux énergies renouvelables crée une externalité locale positive. Nous étudions le degré optimal de coopération dans les politiques de promotion des énergies renouvelables lorsque l’interconnexion entre les deux pays est limitée.This dissertation is focused on the economics of electricity transport and consists in four independent chapters. Chapter 1 proposes a general introduction to the electricity sector and to the distribution activity in France and in Europe. Chapter 2 provides an economic view on how the connection to a distribution network should be priced when the operator considers the spatial distribution of consumers. It highlights the impact of public service constraints on the investment in service quality, the size of the network and the connection fee. The main ingredient is the geographical dispersion of potential consumers in the distribution area and the costs linked to this dispersion as opposed to those common to all connected customers. Chapter 3 addresses the problem of the management of electric thermal losses. We analyze how a specific design incentivizes the network operators to increase network efficiency. We consider a two-node/one-line model to show the importance of thermal losses in the merit order. We then compare two types of management implemented in Europe and assess their impact on the optimal level of consumption and investment. Chapter 4 analyzes the impact of feed-in tariffs in an open economy model and studies the consequences of transmission constraints. We consider two different types of energy sources, renewable and non-renewable, used in each of two countries. We assume that producing electricity thanks to renewable energies creates a positive local externality and question the relevance of a coordinated policy for the promotion of renewable energy in a world of limited connections

World Technology Shocks and the Real Euro-Dollar Exchange Rate

We extend the empirical SVAR literature on real exchange rates by extracting a common stochastic trend in productivity, interpreted as a permanent world technology shock. Overall, we find that innovations to world technology constitute an important, albeit not the dominant, source of movements in the real euro-dollar exchange rate. First, the dollar appreciates significantly in response to such an impulse. Second, the world technology shock accounts for approximately one-fifth of the variance of the forecast error in the real euro-dollar rate at business-cycle frequencies. Our results are in line with previous studies who find that demand or nominal shocks are the dominant sources of fluctuations in relative prices and provides limited support to productivity-based models of real exchange rate determination