The Economic Journal Advance Access

22 Sep 2021

Major Reforms in Electricity Pricing: Evidence from a Quasi-Experiment

Labandeira X, Labeaga J, Teixidó J.

Abstract
The global energy mix and cost structure of the power industry are experiencing a redefinition. Many countries are revamping electricity-pricing systems to guarantee fixed-cost recovery, often by raising the fixed charge of two-part tariff schemes. However, a key assumption of two-part tariff schemes and associated fixed cost recoveries is that consumers discriminate fixed from marginal costs. We conduct a quasi-experiment with data from a major electricity price reform recently implemented in Spain and find robust evidence indicating that consumers fail to distinguish between fixed and marginal costs. As a result, policymakers are not achieving the goal of cost recovery
20 Sep 2021

Gender Differences in Cooperative Environments?*

Gagliarducci S, Paserman M.

Abstract
This paper uses data on bill cosponsorship in the U.S. House of Representatives to estimate gender differences in cooperative behaviour. We find that among Democrats there is no significant gender gap in the number of cosponsors recruited, but women-sponsored bills tend to have fewer cosponsors from the opposite party. On the other hand, we find robust evidence that Republican women recruit more cosponsors and attract more bipartisan support on the bills that they sponsor. We interpret these results as evidence that cooperation is mostly driven by a commonality of interest, rather than gender per se.
20 Sep 2021

Demand Shocks and Firm Investment: Micro-evidence from fiscal retrenchment in Italy*

Coviello D, Marino I, Nannicini T, et al.

Abstract
We study the effect of a persistent demand shock on corporate factor utilization. Our identification strategy leverages a legislative change designed to permanently reduce spending in certain targeted municipalities. This change generates an arguably-exogenous drop in the revenue of procurement firms, which differs depending on each firm’s reliance for its revenue on procurement in the targeted municipalities. We find that firms responded to the demand shock by cutting capital rather than labor. We propose a theoretical mechanism based on the irreversibility of capital investment.