Rationing Rules and Outcomes: The Experience of Singapore's Vehicle Quota System

Since 1990, Singapore has sought to control motor vehicle ownership by means of an auction quota system, whereby prospective vehicle buyers need to obtain a quota license before they can make their purchase. This paper assesses the success of the vehicle quota system in meeting its objectives of stability in motor vehicle growth, flexibility in the motor vehicle mix, and equity among motor vehicle buyers. Two important implementation issues - quota subcategorization and license transferability - are highlighted, and policy lessons are drawn for the design of auction quotas in general. Copyright 2003, International Monetary Fund

The return to education in the mid-20th century: evidence from twins

What was the return to education in the US at mid-century? In 1940, the correlation between years of schooling and earnings was relatively low. In this paper, we estimate the causal return to schooling in 1940, constructing a large linked sample of twin brothers to account for differences in unobserved ability and family background. We find that each additional year of schooling increased labor earnings by approximately 4%, about half the return found for more recent cohorts in contemporary twins studies. These returns were evident both within and across occupations and were higher for sons from lower SES families.First author draf

A branch and bound and simulated annealing approach for job shop scheduling

This paper presents two approaches to the solution of the job shop scheduling problem, namely the branch and bound, and simulated annealing approach. The objective is to schedule the jobs on the machines so that the total completion time is minimized. In the branch and bound approach, the job shop scheduling problem is represented by a disjunctive graph, then the optimal schedule is obtained using the branch and bound algorithm while simulated annealing is a local search based algorithm which will slightly perturb the initial feasible solution to decrease the makespan

Adaptive reference model predictive control for power electronics

An adaptive reference model predictive control (ARMPC) approach is proposed as an alternative means of controlling power converters in response to the issue of steady-state residual errors presented in power converters under the conventional model predictive control (MPC). Differing from other methods of eliminating steady-state errors of MPC based control, such as MPC with integrator, the proposed ARMPC is designed to track the so-called virtual references instead of the actual references. Subsequently, additional tuning is not required for different operating conditions. In this paper, ARMPC is applied to a single-phase full-bridge voltage source inverter (VSI). It is experimentally validated that ARMPC exhibits strength in substantially eliminating the residual errors in environment of model mismatch, load change, and input voltage change, which would otherwise be present under MPC control. Moreover, it is experimentally demonstrated that the proposed ARMPC shows a consistent erasion of steady-state errors, while the MPC with integrator performs inconsistently for different cases of model mismatch after a fixed tuning of the weighting factor

Rent-sharing in the multi-fibre arrangement : evidence from U.S. - Hong Kong trade in apparel

The Multi-Fibre Arrangement (MFA) restricts the access of developing country exporters to developed country markets. It is usually assumed that the exporting countries receive all of the economic rents that result from these import restrictions - making it unclear whether the developing countries gain or lose as a result of the MFA. Recent theoretical work on trade policy under imperfect competition casts doubt on whether exporting countries receive all of the quota rents arising from voluntary export restraints such as those applied by the MFA. Drawing on this theoretical literature, Erzan, Krishna, and Tan (1991) tested and rejected the hypothesis that MFA quota rents on exports from Hong Kong to the United States accrued in full to the Hong Kong exporters. The results in this paper build on that hypothesis-testing analysis and assess its implications for the returns to Hong Kong producers. Their results suggest that rent sharing is an extremely important feature of the market for apparel exports from Hong Kong. U.S. importers were estimated to receive rents that were about 62 percent of the landed price of the imports. The authors conclude that the total potential rents arising from the MFA were split unevenly between the U.S. and Hong Kong - with the U.S. share ranging from 47 percent for skirts to 94 percent for playsuits. If the results of this study are corroborated for other developing countries, the implications of the MFA for developing countries are considerably worse than has typically been assumed.Economic Theory&Research,Access to Markets,Markets and Market Access,Health Economics&Finance,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT

The dynamic behavior of quota license prices : theory and evidence from the Hong Kong apparel quotas

Empirical studies of the welfare consequences of quotas often assume perfect competition everywhere. If this assumption is not valid, welfare estimate and policy recommendations may err dramatically. The popular press often argues that market power is being exercised in markets constrained by import quotas. The authors develop a framework for testing the hypothesis of perfect competition in the market for apparel quota licenses. Drawing on simple models, they predict the behavior of license prices, taking into account four influences on prices: scarcity value, option value, renewal value, and asset value. They explore the effect of imperfections in the license market on license price paths. They test allegations that there is price fixing in the market for Multi-Fibre Arrangement (MFA) apparel quota licenses in Hong Kong. (Hong Kong often serves as a benchmark case for the welfare consequences of the MFA.) They use monthly data on license prices and use rates to test for the presence of imperfect competition. They argue that a concentration of license holding could affect both the supply side and the demand side, by affecting the costs of search. These results accord well with the authors theoretical discussion, in which they point out that license use and price paths with imperfect competition in the license market may be quite different from the corresponding paths in the case of perfect competition - even though the total use of licenses is the same. The authors estimate the structural demand and supply equations of the model, which provide further evidence of imperfect competition in the license market. In particular, the intra-year path of quota license prices and of quota use are found to be affected by concentration in license holdings. The results, in short, suggest that market power exists in Hong Kong's quota license market. Hong Kong is often considered the prime example of perfect competition, so this has major implications for other developing countries.Environmental Economics&Policies,Industrial Management,Markets and Market Access,Access to Markets,Economic Theory&Research

License Price Paths: I. Theory II. Evidence from Hong Kong

In the first of the two companion papers, we show that the dynamic aspects of the license utilization decision in an uncertain environment, together with the usual policy of rewarding high license utilization with future license allocations. creates four components of the license price. These are the scarcity, asset, option, and renewal value components. Each of these components are identified and explored in the context of the existing literature. The effect of imperfections in the license market on license price paths is also explored. In the second paper, we use monthly data on license prices and utilization to test for the presence of imperfect competition in the market for apparel quota licenses in Hong Kong. A competitive structural model which respects the dynamic aspects of the problem is developed and estimated. We argue that concentration could affect the supply side as well as the demand side by affecting the cost associated with the search. The regressions indicate that concentration of license holdings affect the supply of licenses as predicted by models of imperfect competition. Since the implementation scheme encourages full utilization, imperfect competition affects the supply path of licenses rather than total supply. Concentration does not affect the demand side. which means that search costs are not an important consideration.