Proyectos

Marginal Cost Pricing in Hydro-Thermal Power Industries: Is a Capacity Charge Always Needed?

This paper explores marginal cost pricing in hydro-thermal power industries. As in standard peak-load pricing for all-thermal electric systems, pricing consists of an energy charge and a capacity charge. However, the marginal cost of hydro generation now includes the value of water, which is determined endogenously. In turn, the capacity charge equals the marginal cost

School markets: The impact of information approximating school effectiveness

The impact of competition on academic outcomes is likely to depend on whether parents are informed about schools’ effectiveness or valued added (which may or may not be correlated with absolute measures of their quality), and on whether this information influences their school choices. To explore these issues, this paper considers Chile’s SNED program, which

A Note on the Comparative Statics of Optimal Procurement Auctions

We find a necessary and sufficient condition such that a distributional upgrade on a seller’s cost implies a lower expected procurement cost for a buyer. We also show that even under the strongest assumption about this upgrade made in the literature so far, the seller can be worse off, even if this upgrade is costless.

Competition with asymmetric switching costs

We analyze the effects of asymmetric switching costs on two identical firms that produce an homogeneousgood and compete in prices. Both firms inherit a fraction of themarket which is “locked-in” by the switching costs. When switching costs are low, firms face a tradeoff between charging a high price to their locked in customers, or pricing

Multi-period hedge ratios for a multi-asset portfolio when accounting for returns comovement

This article presents a model to select the optimal hedge ratios of a portfolio comprised of an arbitrary number of commodities. In particular, returns dependency and heterogeneous investment horizons are accounted for by copulas and wavelets, respectively. We analyze a portfolio of London Metal Exchange metals for the period July 1993-December 2005, and conclude that

The behavior of stock returns in the Asia-Pacific mining industry following the Iraq war

In this article, we pursue to determine which mining firms have seen their stock returns become more sensitive to fluctuations in energy prices, over a time period predominated by the political turmoil caused by 9/11 and the subsequent invasion of Iraq. By resorting to wavelets and spatial statistics, we characterize the behavior of volatility and

Asimetrías en la Respuesta de los Precios de la Gasolina en Chile

Micro Efficiency and Aggregate Growth in Chile

Using plant-level data on Chilean manufacturing firms for the 1980-2001 period, we estimate and characterize disaggregate total factor productivity. We use these estimates to study the microeconomic sources of aggregate efficiency, a fundamental part of aggregate growth. By decomposing productivity dynamics into production reallocation and within plant efficiency changes, we find that reallocation accounted for

Portfolio management implications of volatility shifts: Evidence from simulated data

Based on weekly data of the Dow Jones Country Titans, the CBT-municipal bond, spot and futures prices of commodities for the period 1992-2005, we analyze the implications for portfolio management of accounting for conditional heteroskedasticity and structural breaks in long-term volatility. In doing so, we first proceed to utilize the ICSS algorithm to detect volatility

Using School Scholarships to Estimate the Effect of Government Subsidized Private Education on Academic Achievement in Chile

This paper estimates the impact of private education on low-income students in Chile. We attempt to reduce selection bias by using reduced-tuition paying, low-income students in private schools as the treatment group, based on our finding that these students were, to some extent, randomly selected out of the public school control group. Propensity score matching

Renegotiation without Holdup: Anticipating Spending and Infrastructure Concessions

Infrastructure concessions are frequently renegotiated after investments are sunk, resulting in better contractual terms for the franchise holders. This paper offers a political economy explanation for renegotiations that occur with no apparent holdup. We argue that they are used by political incumbents to anticipate infrastructure spending and thereby increase the probability of winning an upcoming

Performance of an economy with credit constraints, bankruptcy and labor inflexibility

We present a static general equilibrium model of an economy with agents with heterogenous wealth and endogenous credit constraints due to moral hazard. Credit constraints give rise to inefficiencies which are larger if wealth is distributed more unequally. We show that increases in the loan recovery rate improve the efficiency of the economy and raise