Browsing by Author "Sağlam, Yiğit"

Now showing 1 - 8 of 8

Open Access
Auctioning the Digital Dividend: a Model for Spectrum
(Te Herenga Waka—Victoria University of Wellington, 2012) Sağlam, Yiğit; Ho, Phuong; Daglish, Toby
This paper models a spectrum auction as a multi-unit auction where participantsuse the goods purchased to participate in a constrained multi-good downstream market. We use dynamic programming techniques to solve for the optimal bidding strategy for firms in a clock auction. Firms often value constraining competitor market power highly and inefficient firms will often bid aggressively to minimise competition. Regulators concerned with revenue maximisation have strong incentives to encourage this behaviour capping more efficient firms or capping entrants to the market. In contrast social welfare concerns suggest that allocating spectrum may be more efficient than using an auction.
Open Access
Commuting and Residential Decisions in the Greater Wellington Region
(Te Herenga Waka—Victoria University of Wellington, 2015) Daglish, Toby; de Roiste, Mairead; Sağlam, Yiğit; Law, Richard
This paper studies residential, commuting and car ownership decisions in the Greater Wellington Region of New Zealand. We establish an estimation methodology that is robust to endogeneity between house prices and residential decisions. The paper also makes extensive use of Geographic Information Systems calculations, allowing us to evaluate the impact of schools, greenspaces and sunlight on decisions. The paper finds that commuting decisions are highly affected by demographic variables, that amenities are important in determining neighbourhood preferences, and that school quality, contrary to popular belief, has relatively little effect on decisions.
Open Access
Droughts and farms’ financial performance in New Zealand: A micro farm level study
(Te Herenga Waka—Victoria University of Wellington, 2019) Pourzand, Farnaz; Noy, Ilan; Sağlam, Yiğit
We quantify the impacts of droughts in New Zealand on the profitability of dairy, and sheep and beef farms. Using a comprehensive administrative database of all businesses in New Zealand, we investigate the impact of droughts on farm revenue, profits, return on capital, business equity, debt to income ratio, and interest coverage ratio. Over the period we examine (2007-2016) about half of the districts experienced severe droughts, and almost 85% of districts were affected by more moderate droughts at least once. For dairy farms, there is a strong negative relationship between the occurrence of droughts two years earlier and farms’ revenue, profit and consequently their return on capital. More surprisingly, we found that current (same fiscal year) drought events have positive impacts on dairy farms’ revenue and profit; this effect is most likely attributable to drought-induced increases in the price of milk solids (New Zealand is the market maker in this global market). In general, dairy farmers ‘benefit’ more from drought events when compared to sheep/beef farms, whereas the latter sector has less impact on global prices. These findings are useful for shaping climate-change adaptation as there is a clear variation in the future climate-change projections of drought intensities and frequencies for different regions in New Zealand.
Open Access
International Competitiveness and the Unit-Labor-Cost-Based Competitiveness Index
(Te Herenga Waka—Victoria University of Wellington, 2004) Sağlam, Yiğit
The paper attempts to estimate a unit labor cost based competitiveness index for Turkey. The trade weighted real effective exchange rate isthe generally used measure of external competitiveness,which at timesmay fail to explain why a country's export performance improves despite its overvalued currency. When unit labor costs of Turkey and its trading partners are compared, it is seen that especially over the 1999-2003 period, Turkey's unit labor costs remained far below those of its trading partners and hence the unit labor cost based competitiveness index turned in favor of Turkey. Hence, during this period the overvaluation of the TL was more than compensated by the reduction inunit labor costs. Turkey, during the last few years experienced relatively higher growth rates which was export led and the outcome of increased productivity. This is why despite the growing output, employment was notaffected.
Open Access
Optimal Pricing of Water: Optimal Departures from the Inverse Elasticity Rule
(Te Herenga Waka—Victoria University of Wellington, 2011) Sağlam, Yiğit
I consider the problem of water usage, developing a model to analyze the optimal pricing of water within a second-best economy. Consumers are assumed to have two main needs for water|drinking and non-drinking. Water is also used to produce food: The agricultural sector has a derived demand for water. As a water supplier, the local government may price discriminate across consumers and farmers. I introduce the second-best pricing scheme, derive conditions for the marginal-cost pricing and inverse-elasticity rules to apply, and analyze when it is optimal for the government to optimally deviate from these two pricing schemes.
Open Access
Structural Econometric Methods in Auctions: A Guide to the Literature
(Te Herenga Waka—Victoria University of Wellington, 2012) Sağlam, Yiğit
Auction models have proved to be attractive to structural econometricians who, since the late 1980s, have made substantial progress in identifying and estimating these rich game-theoretic models of bidder behavior. We provide a guide to the literature in which we contrast the various informational structures (paradigms) commonly assumed by researchers and uncover the evolution of the eld. We highlight major contributions within each paradigm and benchmark modi cations and extensions to these core models. Lastly, we discuss special topics that have received substantial attention among auction researchers in recent years, including auctions formultiple objects, auctions with risk averse bidders, testing between common and private value paradigms, unobserved auction-speci c heterogeneity, and accounting for an unobserved number of bidders as well as endogenous entry.
Open Access
Supply-Based Dynamic Ramsey Pricing with Two Sectors: Avoiding Water Shortages
(Te Herenga Waka—Victoria University of Wellington, 2012) Sağlam, Yiğit
In many countries current water-pricing policies are dictated by the sole objective of breaking-even in each period. This results in large withdrawals which are not sustainable in the long-run hence not optimal. In this paper I derive the optimal dynamic water resource management policy of a benevolent government which supplies water to households and agriculture. I compare the efficiency implications of the current and the optimal pricing policies using simulations. I endogenize crop-choice decisions and estimate the changes in the crop composition with the generalized method of moments. Using data from Turkey I find that under the policy of break-even prices the average number of years before the government runs into the water shortage when it cannot meet the sectoral demands is eight years. In contrast if the government were to choose water prices optimally then water shortages would be practically nonexistent over the next century.
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The trade impacts of a food scare: The Fonterra contamination incident
(Te Herenga Waka—Victoria University of Wellington, 2016) Stojkov, Katarina; Noy, Ilan; Sağlam, Yiğit
This paper presents the results of an investigation into the economic implications for New Zealand of the 2013 Whey Protein Concentrate contamination incident. It assesses the impact of this incident on dairy exports using synthetic control methods. A synthetic counterfactual scenario where the incident did not occur is developed using weighted information from other countries unaffected by the scare. We find that there was an initial negative shock to the exports of products that were thought to have been contaminated, but that there were no significant sustained impacts on other dairy products. The affected products made up only a small proportion of New Zealand dairy exports, with the vast majority of dairy exports being unaffected. Infant formula exports appear to have recovered somewhat in the more than a year after the scare, however whey product exports (the contaminated product) remain lower than they otherwise would have been.