Tighter Price Cap Regulation on Consumer Surplus and Utility
Kang, Weisman, and Zhang (2000) demonstrated that, under a tighter price cap, consumer welfare increases with the independence of demands. Conversely, the tighter price cap may negatively impact consumer welfare in situations involving interdependent demands. This paper identifies an overlooked property of Kang et al. (2000), namely, that the cross-price effects should be symmetrical without an income effect and demand functions of a Hicksian type. This paper reveals the invariant conclusion that consumers always benefit from a tighter price cap. Besides, it further derives the effects of the tighter price cap on consumer utility, and concludes that the net price elasticity of demand is the key to the effect of the average revenue constraint.
Do consumers benefit from tighter price cap regulation
Abstract This paper examines whether consumers necessarily benefit from tightening the price cap. We find that a tighter price cap always increases consumer welfare when demands are independent. Conversely, when demands are interdependent a tighter price cap may reduce consumer welfare.
Implementation of Tourism Satellite Account: Assessing the Contribution of Tourism to the Croatian Economy
Compiling the indicators of tourism consumption and the output of tourism industries, Tourism Satellite Account (TSA) provides a framework for internationally harmonized measurements of direct macroeconomic contribution of tourism. Ivandic and Marusic provide a detailed methodological approach for the transfer of TSA theoretical concepts to the assessment of tourism economic contribution on the case of the Croatia. Giving that the TSA compilation is still characterized by a surprisingly wide range of ‘styles’ used, the chapter contributes to a better understanding of the issues related to measurement of direct tourism impacts. It also gives a set of baseline criteria for resource allocation within tourism policy and the further evaluation of its effectiveness.