Reducing Rents from Energy Technology Adoption Programs by Exploiting Observable Information
In this CPB Discussion Paper, we study how regulators may improve upon the efficiency of their energy technology adoption programs by exploiting readily observable information to limit rent extraction by firms. Using panel data on 862 investment decisions in the Netherlands, we find that rent extraction is closely linked not only to technology characteristics, but also to the firm's capital budgetting technique. In particular, we find that rms are more likely to extract rent when either the technology's pay-back period or its required investment is lower, but less likely if they do not use a formal capital budgeting technique. Standard firm characteristics, such as size and sector, correlate with firms' use of capital budgeting techniques, thereby partly resolving the regulator's asymmetric information problem.
|Date of creation:||Oct 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (070) 338 33 80
Fax: (070) 338 33 50
Web page: http://www.cpb.nl/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sarnat, Marshall & Levy, Haim, 1969. "The Relationship of Rules of Thumb to the Internal Rate of Return: A Restatement and Generalization," Journal of Finance, American Finance Association, vol. 24(3), pages 479-90, June.
- Gallagher, Kelly Sims & Muehlegger, Erich, 2011.
"Giving green to get green? Incentives and consumer adoption of hybrid vehicle technology,"
Journal of Environmental Economics and Management,
Elsevier, vol. 61(1), pages 1-15, January.
- Gallagher, Kelly Sims & Muehlegger, Erich, 2008. "Giving Green to Get Green: Incentives and Consumer Adoption of Hybrid Vehicle Technology," Working Paper Series rwp08-009, Harvard University, John F. Kennedy School of Government.
- Chandra, Ambarish & Gulati, Sumeet & Kandlikar, Milind, 2010. "Green drivers or free riders? An analysis of tax rebates for hybrid vehicles," Journal of Environmental Economics and Management, Elsevier, vol. 60(2), pages 78-93, September.
- Campbell, Carl M, III & Kamlani, Kunal S, 1997. "The Reasons for Wage Rigidity: Evidence from a Survey of Firms," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 759-89, August.
- Stephen J. Decanio & William E. Watkins, 1998. "Investment In Energy Efficiency: Do The Characteristics Of Firms Matter?," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 95-107, February.
- Aalbers, R.F.T. & van der Heijden, E.C.M. & Potters, J.J.M. & van Soest, D.P. & Vollebergh, H.R.J., 2009.
"Technology adoption subsidies : An experiment with managers,"
Other publications TiSEM
3fd22e8e-1390-40c9-8031-f, Tilburg University, School of Economics and Management.
- Aalbers, Rob & van der Heijden, Eline & Potters, Jan & van Soest, Daan & Vollebergh, Herman, 2009. "Technology adoption subsidies: An experiment with managers," Energy Economics, Elsevier, vol. 31(3), pages 431-442, May.
- Rob Aalbers & Eline van der Heijden & Jan Potters & Daan van Soest & Herman Vollebergh, 2007. "Technology Adoption Subsidies: An Experiment with Managers," Tinbergen Institute Discussion Papers 07-082/3, Tinbergen Institute.
- Wirl, Franz, 1999. "Conservation Incentives for Consumers," Journal of Regulatory Economics, Springer, vol. 15(1), pages 23-40, January.
- Pindyck, Robert, 1989.
"Irreversibility, uncertainty, and investment,"
Policy Research Working Paper Series
294, The World Bank.
- Pindyck, Robert S., 1990. "Irreversibility, uncertainty, and investment," Working papers 3137-90., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Robert S. Pindyck, 1990. "Irreversibility, Uncertainty, and Investment," NBER Working Papers 3307, National Bureau of Economic Research, Inc.
- Jerry A. Hausman, 1979. "Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 33-54, Spring.
- Kenneth Train, 2003.
"Discrete Choice Methods with Simulation,"
Online economics textbooks,
SUNY-Oswego, Department of Economics, number emetr2, March.
- Morris M. Kleiner & Richard B. Freeman, 2000. "Who Benefits Most from Employee Involvement: Firms or Workers?," American Economic Review, American Economic Association, vol. 90(2), pages 219-223, May.
- Parsons, Donald O., 1996. "Imperfect 'tagging' in social insurance programs," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 183-207, October.
- David S. Loughran and Jonathan Kulick, 2004. "Demand-Side Management and Energy Efficiency in the United States," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 19-44.
- Franz Wirl, 2000. "Lessons from Utility Conservation Programs," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 87-108.
- Zivin, Joshua Graff & Zilberman, David, 2002. "Optimal Environmental Health Regulations with Heterogeneous Populations: Treatment versus "Tagging"," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 455-476, May.
- Wirl, Franz, 1995. "Strategic consumers' reactions to conservation incentives," Utilities Policy, Elsevier, vol. 5(2), pages 109-113, April.
- Torleif Haugland, 1996. "Social Benefits of Financial Investment Support in Energy Conservation Policy," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 79-102.
- Graham, John R. & Harvey, Campbell R., 2001. "The theory and practice of corporate finance: evidence from the field," Journal of Financial Economics, Elsevier, vol. 60(2-3), pages 187-243, May.
- Eric Malm, 1996. "An Actions-Based Estimate of the Free Rider Fraction in Electric Utility DSM Programs," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 41-48.
- Frank J. Convery, 2011. "Reflections--Energy Efficiency Literature for Those in the Policy Process," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(1), pages 172-191, Winter.
When requesting a correction, please mention this item's handle: RePEc:cpb:discus:194. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.