Infrastructure & Utility Economics – color paperback

$75.00

Details

Paperback: 452 pages

Publisher: Professional Economics Ltd Review 2nd edition 10 July 2017

Language: English

ISBN- 13: 978-0957699014

Product dimensions: 23.4 x 15.6 x 2.5 cm

 

About the author

Mark Hull (Author)

Following a career as a government economist, corporate strategist and manufacturing company CEO, Mark Hull worked as a private sector utilities economist for 13 years. During this time he worked for some of the world’s top private consultancies offering analyses and advice in the water, electricity, gas and rail industries on strategic, regulatory, cost-cutting, merger and restructuring issues in the UK, continental Europe, North America, South America, and Asia. He now teaches economics and business strategy in Universities and Business Schools.

100 in stock

SKU: I&UE 2nd edn. printed Category:

Description

This book explains infrastructure economics: the dynamic sequence of investor and management decisions that determines the evolution of market structures in industries with significant sunk costs, such as electricity, gas, water, wastewater, rail, road and broadband telecoms. These industries are often known as natural monopolies, but professionals have known for decades that the explanation for why they are monopolies found in most economics textbooks (high fixed costs) is wrong. This textbook is the first to propose an alternative theory based on a sequential model of sunk costs as an asymmetry in time, which professionals are sure is the true reason these industries are such strong monopolies.

The second edition of this seminal text, formerly known as Basic Network Utility Economics, explains why the natural monopolies – electricity, gas, water and rail – are actually nothing like the explanations offered in student microeconomics texts. By a utility professional, this book, is the only one to define sunk costs properly – as asymmetries in technology, time and space –  and then to develop a very general, yet simple, sequence model to explain how this sinking of costs that are geographically and technologically unique creates massive entry barriers. Using simplified systems models it explores the circumstances under which second and subsequent entries can rationally occur, leading to a theory which accurately predicts why electricity, gas, water, wastewater and rail are nearly always monopolies, but broadband landlines, bus companies and postal services may be oligopolies, duopolies or monopolies. The general theory handles technological and market change very simply, dispensing with all notions of fixed revenue and cost curves, and is generally applicable to any industry in any circumstance – e.g. the automobile, or aircraft-making, or mobile phone industries – but gives the clearest results where sunk costs are significant (as in all three of those industries).

Having introduced students to the basics of the utility industries, and to the general theories of utility evolution, the book explains the techniques that are actually used by practitioners to analyse and advise policymakers, in simple language suitable for anyone with an understanding of basic economics. It explains how to calculate forward-looking long run marginal costs in a time-series sense, how to measure network outputs properly, and how to compare the efficiency of different networks in the same industry fairly (not as obvious as one might think). In the course of this “easy and informative” exposition the limitations of neoclassical models are exposed, and more general tools are gently explained, using 148 colour diagrams and a minimum of algebra.

This is the only textbook to explain the basic stages of infrastructure economics and of each heavy utility (the value chains and the nature of energy demand, water demand, wastewater demand and transport demand), define sunk costs properly, propose a coherent theory of sunk costs to explain all market structures, and then use this theory a) to develop standard professional utility economist techniques such as measuring the long run marginal costs of utilities, determining utility outputs and techniques for measuring the efficiency of individual utilities, and b) to apply this theory to recent global examples where utilities around the world have been restructured and often privatised.

The full contents of the book are described in Infrastructure & Utility Economics – Introduction & Contents

Publication date: 10 July 2017¦ ISBN-13: 978-0-9576990-1-4 ¦Edition: Second

Additional information

Weight 0.76 GBP
Dimensions 23.4 x 2.5 x 15.6 cm

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