Over-indebtedness: what’s new?

Since the publication in 2004 of Oxera’s study on over-indebtedness in the UK, consumer borrowing has continued to rise, passing the £1 trillion threshold, and the level of household debt continues to make the headlines. Yet the latest data does not suggest that current levels of indebtedness are unsustainable. What are the recent trends in indebtedness and what progress have the government and the banking community made in this area in the past year?

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Financing the water industry: lessons from PR 04

The 2004 water industry price control review, and the parallel review in the electricity distribution industry, tackled important issues that are relevant for the future of utility regulation in the UK in these sectors and more widely. Keith Palmer, NM Rothschild & Son and Cambridge Economic Policy Associates, and Hannah Nixon, Cambridge Economic Policy Associates, discuss the lessons that can be learnt.

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Pricing signals at airports: implications for airlines and the environment

As the demand for flights continues to grow, there is increasing concern about congestion at airports and the noise and emissions produced by aircraft. Airport charges can play a key role in ensuring that existing infrastructure is used efficiently, and in encouraging airlines to use quieter and less-polluting planes.

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How should the ex post evaluation of trunk road schemes be enhanced?

This report assessed the feasibility of enhancing the programme of ex post evaluation of trunk road schemes currently carried out by the Highways Agency in England. It developed a toolkit, based on the priorities of stakeholders for evaluation evidence, from which future evaluators of trunk road schemes can choose approaches.

To access the executive summary, click here .
To access the appendices, click here .

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What is the impact of a minimum price rule?

The Dutch Ministry of Economic Affairs commissioned Oxera to undertake research to support the assessment of the impact of a ‘minimum price rule’. The Dutch Parliament debated the desirability of a price rule that would forbid retailers from selling goods at a price lower than that which they pay to their suppliers. This debate on the minimum price rule had principally arisen as a response to a price war between supermarkets in the Netherlands that began at the end of 2003. The price war resulted in lower prices and therefore benefited consumers, However, the concern was that in the medium or long term, the price war may harm consumers by forcing smaller supermarkets and more specialised retailers to exit the market, thus reducing the number of players, the variety of products and availability of supermarkets close to where people live. The analysis undertaken by Oxera focused on quantifying some of the costs of a minimum price rule. A statistical analysis of prices in countries that have a minimum price rule (Austria, Belgium, Germany, France, and Ireland) was undertaken. The analysis showed that the minimum price rule in France and Ireland may have had an upward effect on prices. Based on Oxera’s study and other evidence, on July 1st, the Dutch Ministry of Economic Affairs decided not to introduce a minimum price rule.

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Attack of the isochrones: an emerging approach to defining markets

Geographic market definition is an important aspect of many merger inquiries, particularly those involving chains of outlets in several localities. In light of recent UK Competition Commission and Office of Fair Trading decisions, is it possible to identify an emerging consensus on assessing local market definition?

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Renewable generation: is there a future for independent producers

The UK renewable generation market is remarkably diverse; yet as it continues to expand, and the scale of the projects required to meet government targets increases, the nature of investment in renewable generation could change. What effect might this change have on the market for independent renewable generation?

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Bankruptcy codes: how do they affect business?

Julian Franks, Professor of Finance, London Business School, and Oxera Director, explains how recent research into bankruptcy codes reveals significant and sometimes unexpected differences between bankruptcy procedures in the UK and those of other countries.

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What are the costs and benefits of near real-time gas information?

The UK Offshore Operators Association commissioned Oxera to estimate the costs and benefits associated with the publication of real-time information on flows of gas into the GB national transmission system. The study considered two variants of information provision—the first being the information that will be provided from July 2005 under Phase 3 of the voluntary information disclosure scheme, with the second being a more disaggregate information set proposed by energywatch in Network Code Modification 727. The study found that more publicly available real-time information is likely to lead to more efficient prices in the wholesale gas market and narrower bid–offer spreads, benefits which were likely to exceed £40m net present value over 15 years. However, the study also suggested there were significant costs—both the direct costs of the infrastructure and development of processes needed to deliver the information, and also possibly significant indirect costs associated with more volatile prices.

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