• Journal of Distribution Science
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• v.15 no.12
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• pp.53-60
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• 2017

Purpose - This paper analyzes the effect of the handset subsidy and the Mobile Number Portability subscriber subsidy regulation, which are the main regulation adopted in "Law on the Improvement of the Mobile Terminal Distribution System" (Mobile Terminal Distribution Act), on the social surplus, the consumer surplus and profits of telecommunications carriers. We focus our analysis on whether the service charge competition is stimulated enough so that it can compensate for the loss of subsidies. Research design, data, and methodology - We use simple economic model to assess the impact of the handset subsidy and the Mobile Number Portability subscriber subsidy regulation. Unlike the former researches on this topic, we depart from using Hotelling model, and instead use the switching cost model, which uses switching cost as a parameter of market powers of telecommunications carriers. We also study the effect of the two different regulations when they are adopted both independently and concurrently. Results - If the market powers of telecommunications carriers are over certain threshold, contrary to the regulatory agency's assertion, the service charge competition would not be stimulated enough to compensate for the deduction in the subsidies, and thus the consumer surplus is compromised. Number Portability subsidy, especially, undermines the rival's market power and thus reduces the service charge. On the other hand, the regulations will also increase the profits of telecommunications carriers. However, social surplus is maximized when both of the regulations are present because the regulations reduces the frequency of switching handsets inefficiently. Conclusions - In enacting the Mobile Terminal Distribution Act, the telecommunications regulatory agency asserted that the regulation on subsidies will stimulate service charge competition, and in the long run, enhance the consumer surplus. However, contrary to the regulatory agency's assertion, subsidy regulation, especially the regulation on Number Portability subsidy, reduces consumer surplus. On the other hand, the Mobile Terminal Distribution Act can also increase the profits of telecommunications carriers because it decreases competition among the telecommunications carriers. However, the Mobile Terminal Distribution Act can increase the social surplus because it reduces inefficient switching of handsets.

• The Journal of Fisheries Business Administration
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• v.47 no.2
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• pp.33-41
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• 2016

The purpose of this study is to estimate the economic value of boat fishing experience marine tourism activity in Jeju Island's Chagwido. The economic value is estimated as consumer surplus using count data models including the truncated Poisson model and the truncated negative binominal distribution model. This study collects the effective 504 questionnaires from boat fishing experience tourists in Jeju Island's Chagwido. The truncated negative binominal distribution model was statistically more suitable and valid than other models. The truncated negative binominal distribution model was applied to estimate consumer surplus as economic value from boat fishing experience tourism activity in Jeju Island's Chagwido. A consumer surplus value per trip was estimated as about 209,900 won. The annual economic value from boat fishing experience tourism activity was estimated as 273,700 won in Jeju Island's Chagwido. Consequently, boat fishing experience marine tourism activity has a very large economic value in Jeju Island.

• Journal of Preventive Medicine and Public Health
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• v.22 no.3 s.27
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• pp.398-405
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• 1989

A change in the consumer's surplus was measured in order to evaluate the social benefit to be derived from expanding health insurance to the entire population. The most refined and correct way to measure a project's net benefit to society is to determine a change in the consumer's surplus. Benefits from introducing the health insurance program to the uninsured people can be classified into two elements. The first is the pricing-down effect(E1) which results from applying the insurance price system, which is lower than the actual price, to the uninsured patients. The second effect(E2) is a decrease in actual payment because an insured patient pays only a portion of the total medical bill(copayment). We collected medical price information from the data banks of 93 hospitals, and obtained information of medical utilization by referring to the results of other research and from data published by the Korean Medical Insurance Societies. The total net benefit was estimated as \214 billion, comprising the first effect(E1) of \57 billion and the second effect(E2) of \157 billion. The price elasticity of physician visits is less than that of hospital admissions: however, benefits from the increase in physician visits are greater than those from hospital admissions because there are considerably more of physician visits than hospital admissions. The sensitivity analysis also shows the conclusion that expansion of the health insurance program to the entire population would result in a positive net benefit. Therfore, we conclude that the National Health Insurance Program is socially desirable.

• Journal of Korea Water Resources Association
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• v.39 no.12 s.173
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• pp.1057-1066
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• 2006

Water is an indispensable input to human's existence and industrial production. A water supply project would demand considerable costs, but produce economic benefits, which are importantly utilized in the project evaluation. In this situation, this study attempts to value the economic benefits from the residential water supply in Seoul. In particular, yearly consumer surplus and economic value of water supply for eleven water authority agencies in Seoul are measured during the period 2001-2004. Information on price elasticity required in calculating consumer surplus is obtained from direct estimation of the residential water demand function, and the consumer surplus is assessed by using a recently developed formula. Price elasticities used here are -0.810 and -1.011, and the estimated consumer surplus and economic value amount to 131.9 to 164.6 billion won and 398.6 to 431.3 billion won, respectively.

• The Transactions of the Korean Institute of Electrical Engineers A
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• v.52 no.10
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• pp.616-623
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• 2003

Competition among electric generation companies is a major goal of restructuring in the electricity industry, The trading system in an electricity market has been one of the most important issues in deregulated electricity market. This paper deals with comparisons of the major two types of the trading system: compulsory pool market and bilateral contract market. The two trading systems are compared quantitatively from the viewpoint of consumer's surplus and social welfare, This paper, also, proposes a unified model of Cournot and Bertrand for analyzing the mixed trading system of pool market and bilateral contract market. Nash equilibrium of the unified model is derived by criteria for participating in bilateral contract market. Numerical results from a sample case show that a mixed trading system of pool market and price-competitive bilateral market is beneficial to consumer from the view points of consumer's surplus.

• Journal of Korea Port Economic Association
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• v.32 no.3
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• pp.109-122
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• 2016

As increasing of container throughputs, port business market in Korea has been developed. However, due to the introducing of a handling fee reporting system in 1999 and surplus of facilities, port business market in Korea turned into deadly competition with lowering the handling fee. Due to the reasons, the handling fee in 2015 declined as much as 50% of in 2000. Therefore, this study analyzed whether the handling fee decline caused consumer surplus in the port business market of Korea or not. To do that, this study applied a methodology of Alexander for estimating the consumer surplus and Hausman's model using Hicksian demand. As the result of the analyzing, due to the excessive decreasing of the handling fee compared the import & export demand, consumer surplus of the port business market in Korea was decreased. However, due to the exception of transshipment from demand in this study, transshipment demand is needed to be considered to estimate of economic value of port business market in Korea in the future. Also, economic value of port business including subsidiary businesses will be estimated in order to strengthen the method for estimating economic benefit of port construction.

• Korean Journal of Agricultural Science
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• v.49 no.4
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• pp.761-769
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• 2022

The Livestock Raw Material Purchase Fund is a policy to increase the export of livestock products by providing loans to exporters of livestock products (including byproducts). The policy started in 2015 and the annual budget is about 26 billion won. However, a quantitative evaluation of policy effects has not yet been made. Therefore, in this study, the economic surplus of the policy was analyzed using the equilibrium displacement model (EDM). From the results of the welfare analysis, from 2016 to 2019, producer surplus in the chicken and duck market increased by KRW 70.9 billion, while consumer surplus decreased by KRW 70 billion. In other words, the total economic surplus of the chicken and duck market increased by about one billion won during the same period due to the increase in export demand according to the policy. Therefore, the Livestock Raw Material Purchase Fund can be viewed as a policy to maintain and increase export demand for export livestock products and to improve the economic surplus of the livestock product market. Also, since the policy is based on loans, it does not place a burden on the government's finances. Therefore, this policy should continue in the future.

• Journal of Environmental Impact Assessment
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• v.22 no.4
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• pp.291-302
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• 2013

The aim of this study is to assess the social value of Ham-Pyung Butterfly Festival in the year of 2011. The tool for the assesment is the zonal travel cost method. The result of the study can be summed up as follows; First, the average individual consumer's surplus measures approximately from 29,700 to 30,100 Won. Second, the total consumer's surplus, that is the social value of the festival, ranges approximately from 7.6 to 7.7 billion Won. The most beneficiary of the event is turned up to be the people who are living in the outside of Ham-Pyung and go on a tour there. For that reason, the central government looks to have the obligation to support and to sponsor the festival.

• Asia pacific journal of information systems
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• v.20 no.2
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• pp.39-62
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• 2010

As an engineered product, a software package has multiple dimensions that must be designed judiciously to enhance its competitive viability. Functionality, reliability and price are three such common dimensions. However, many software products are sold as bundles of individual components and the competitive impact of bundling has received less attention in the research literature. In this paper, we examine the implications of software vendors using bundling as an element of competitive strategy. A game theoretic model of the actions of an incumbent and a new entrant is developed and the impact on vendor and consumer welfare is analyzed. Numerical experiments with the model show that (i) increasing bundle size is an effective strategy for the incumbent to increase its payoff at the cost of the entrant's payoff and consumer surplus, especially when the entrant's quality is low (ii) in the presence of bundling, the entrant can still increase its own payoff and consumer surplus at the cost of the incumbent's payoff, by increasing product quality up to the level that best segments market demand with the incumbent and (iii) an increase in bundle size by the incumbent, or an increase in quality by the entrant, can both result in an increase of total surplus. Similar results are observed in a related case where the entrant offers free software bundles. Our results provide insights into how software vendors may strategically use bundling and quality as additional product dimensions in order to stay competitive in the market. These results also inform the competing vendors of the impact of bundling related public policy actions on their respective payoffs.

• Journal of Energy Engineering
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• v.24 no.2
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• pp.9-16
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• 2015

As electricity is an indispensable input to human's existence and industrial production, economic benefits arise from consumption. The economic benefits of the electricity consumption are useful information in various fields of electricity-related policy. Therefore, this study attempts to value the economic benefits from electricity use. The economic benefit of electricity consumed is the area under the demand curve which made of the sum of the actual consumer expenditure and the consumer surplus. Consumer expenditure can be easily observed but the information on price elasticity of demand is necessarily required to compute consumer surplus. This study derives the estimates for price elasticities through literature review. The price elasticities of the electricity demand for residence, industry, and commercial are estimated to be -0.332, -0.351, and -0.263, respectively. Because the consumer surplus of the electricity consumption for residence, industry, and commercial are computed to be 191.54, 143.44, and 231.91 won per kWh, respectively. Given that average prices of electricity use were 127.02, 100.70, and 121.98 won per kWh for the year 2013, the economic benefit are calculated to be 318.56, 244.14, and 353.89 won per kWh, respectively. We can convert the values to 321.96, 246.75, and 357.67 won per kWh in 2014 constant price, respectively, using consumer price index. They can be used in the economic feasibility analysis of a new electricity supply project.