Category: Other

Decarbonisation of the UK Electricity Sector

Posted on by Rhys Williams

As part of the UK’s target to achieve net-zero carbon emissions it has set the target of achieving a reduction in greenhouse gas (GHG) emissions by 61% in 2030, compared to 1990 levels (Table 1). Between 1990 and 2021 (latest year available), we have seen a strong reduction in emissions (73%) from the electricity sector but a lesser reduction (9%) in heating[1] and (13%) transportation (Table 1). The 9% reduction in emissions from heating over the last 30 years is far from the 27% reduction required over the next nine years. In the transport sector, where 2021 figures are likely depressed due to COVID-19, targets require a 33% reduction over the next nine years. [...]

Will the rise of AI cause the downfall of a monopolist? How Google can adapt to the revolution in internet search and maintain its incumbent position

Posted on by Rhys Williams

This is an essay I recently wrote as part of my MRes Business Economics course.

The rise of large language models (LLMs) including generative pre-trained transformer models (GPTs) has the power to upend many traditional digital business models, including those in the search engine sector. LLMs allows consumers to easily obtain answers to their questions, in a personalised and engaging manner, without having to navigate through search results and paid advertisements. ChatGPT has already demonstrated that this is a disruptive technology with phenomenal consumer interest – more than 100 million people had used the product within 2 months of its launch, making it the fastest growing consumer application in history[i], and demonstrating the power of S-curve dynamics and tipping points in this market. [...]

Extensions of the Household Demand Model

Posted on by Rhys Williams

The household demand model fails to explain the sharp falls in birth rates over short stretches of time (c.f. Coale and Watkins). To overcome this issue we need to incorporate externalities, ideational approaches and institutional approaches into our model.

Macro-level externalities mean that the socially optimal number of children differs from the privately optimal number. The most fundamental macro-level externality is whether population growth is good for a population. Considering other macro-externalities, we turn to research conducted by Lee and Miller who try to quantify macro-externalities to childbearing, which include the public costs associated with education, healthcare and pensions, which would be negative. [...]

The Household Demand Model

Posted on by Rhys Williams

The household demand model follows the tradition of neoclassical economics with rational maximising agents. It was devised in the 1960s and 1970s with contributions from Becker, Willis and Easterlin. The model posits a couple as being rational agents who wish to maximise their utility function which incorporates pleasure from children (their role as a consumption good), subject to their income constraint which includes time and thus allows us to examine the opportunity cost of having children on time.

Factors making it difficult to model demography:

  • Parents are both the demanders and suppliers of children, which makes it difficult to observe prices of child services.
[...]

An Introduction to the Economics of Demography

Posted on by Rhys Williams

Is population growth good or bad?

When exploring population we fundamentally need to know whether it is good or bad for economic growth and development. There are various reasons and models to believe that population growth does indeed promote growth, but many others which refute this and argue that high population inhibits growth. The Solow model is one such model which would imply that high population growth reduces economic growth, because if there are more people then we need to train them and provide them with capital which depletes the fixed level of investment spending. If we are spending more investment money on equipping workers with basic tools, then we have less money to invest in better tools which may enhance economic growth and permit the economy to emerge from a poverty trap; for example, by allowing it to move into the manufacturing sector, with higher incomes than the more basic agricultural industries. [...]

Staff Casualisation and Student Satisfaction

Posted on by Rhys Williams

A paper of mine, The Effect of Casual Teaching on Student Satisfaction: Evidence from the UK, has recently been published in Education Economics.

The paper evaluates the relationship between the proportion of university teaching conducted by individuals on a casual contract (*) and student satisfaction. This is of interest for a number of reasons. Firstly, because students are often seen as consumers in the UK’s higher education sector and often have to pay large fees to attend university. We should therefore hope that such consumers are satisfied with their purchase (in economic terms), or in other words, that students are satisfied with their uni experience. [...]

What is Social Ontology and why should Economists care?

Posted on by Rhys Williams

Literally, social ontology is the study of social nature and it concerns itself with “how existents exist”1. It is the study of the social realm which includes the “domain of all phenomena, existents, properties”2 whose existence depends upon humans and their interactions. To paraphrase Little “almost all human action is social: socially oriented, socially embedded or socially constructed”6.  So how can it be useful for illuminating the study of economics? If economics is the study of people, and how they interact to form markets, bargain with each other, and more generally interact economically, then we need to examine an economist’s worldview on how these interactions are governed. [...]

Why has wage inequality risen?

Posted on by Rhys Williams

Wage inequality has increased in many economies in recent decades. Discuss the three leading hypotheses regarding the causes of this increase. What does the empirical evidence tell us about the quantitative importance of each of these factors?

The US economy has almost double since the 1970s, and labour productivity has risen over this period. Yet real wages for the median worker hasn’t changed much since the 1970s, and below-median male wages have fallen; showing that the increasing size of the economy hasn’t been fairly distributed.

The rise in inequality between high skilled and low skilled workers is particularly pronounced, with Autor finding that households which are composed of university education individuals earned $30,298 more than non-skilled workers in 1979, but this rose to $58,249 by 2012, an increase of 92%. [...]

Did small scale firms inhibit Victorian Growth?

Posted on by Rhys Williams

Britain’s manufacturing firms have been accused of remaining family-run and small scale in the period 1850-1914, so ignoring the benefits of the large corporation evident in the USA. Discuss whether this represents a form of entrepreneurial failure by the owners of British firms.

Chandler identifies that corporation’s in America are vertically and horizontally integrated, invested in new technology and produced the latest industrial wares such as electricals, chemicals and automobiles. Britain was characterised by an “atomistic organisation of production”, according to Elbaum and Lazonick, with many small firms that were run by families. This is evidenced by the fact that in 1880s less than 10% of the manufacturing sector was accounted for by the largest 100 firms, the US figure was 22% (Hannah 1983). [...]