Economics of regulation

CPRS handouts will cost the country dearly

Created on Tuesday, 29 December 2009 11:00

In a recent article for The Australian (29 Dec 09) Henry comments on the 264's proposed CPRS (Carbon Pollution Reduction Scheme) Read more here

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CPRS_handouts.pdf

Economics of regulation

Regulatory Risk [Draft version]

Created on Tuesday, 13 March 2001 11:00

Assets with a value of over $130 billion are regulated in Australia. We define regulatory risk as being regulation that increases the cost of servicing this capital and analyse the sources of this risk. We show that unbiased and symmetric errors will generally create asymmetric risk for the firm, that investors cannot fully diversify against this risk, and that the CAPM beta may even fall when it occurs. The paper concludes with recommendations aimed at reducing regulatory risk.

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papers-ergas-regrisk-mar01.pdf

Economics of regulation

An Excess of Access: An examination of Part IIIA of the Australian Trade Practices Act

Created on Wednesday, 23 December 2009 11:00

In a recent issue of 'Agenda' Magazine Henry comments on Part IIIA of the Australian Trade Practices Act.

Abstract:
Part IIIA of the Australian Trade Practices Act defines circumstances in which a facility owner may be required to provide a third party with use of its facility. This paper examines what Part IIIA might be doing from an economic perspective and criticises ‘monopoly leveraging’ arguments for third-party access. It argues that the transactions costs of access are potentially significant, and can exceed any efficiency gains third-party access permits. These contentions are corroborated by reference to the long-running dispute between the Fortescue Metals Group and BHP Billiton Iron Ore over access to rail track in the Pilbara region of Western Australia.

Read Henry's article here

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excess_of_access.pdf

Economics of regulation

Some economic aspects of asset valuation

Created on Tuesday, 13 June 2000 10:00

This paper considers the choice between historical and current value approaches and the issues involved in choosing a starting position for valuation. It then analyses the role of optimisation and reviews issues associated with the treatment of excess capacity. It concludes by drawing implications for the approaches to valuation adopted by the Australian Competition and Consumer Commission.

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papers_ergas_asset_valuation_june00.pdf