Other Research Projects
Recently completed research
The Costs of Residential Water Scarcity in Cyprus: Impact of climate change and policy options
This paper presents an assessment of the costs of water scarcity in Cyprus, today and in the next twenty years, accounting also for the effect of projected climate change in the region. We focus on the residential sector, accounting also for tourism and industry. Using a simple demand function we first compute total scarcity costs in Cyprus for the entire period 2010–2030 for three scenarios of future water demand. Our central estimate shows that the present value of total costs due to water shortages in this period will amount to 72 million Euros (at 2009 prices), and if future water demand increases a little faster these costs may reach 200 million Euros’2009. Using forecasts of regional climate models we find costs to be about 20% higher in a climate change scenario. We also find that, compared to the loss of consumer surplus due to water shortages, desalination is most probably a costly solution, even if some environmental damage costs from the operation of desalination plants are not accounted for.
This study is presented in detail in the publication:
Current Research
Competition in Cyprus: Challenges and Prospects
Academic Advisor: Associate Professor Sofronis Clerides
Competition is the driving force of market economy. Businesses wishing to gain customer loyalty have to constantly remain vigilant and offer quality products and services at affordable prices. The European Union has recognized the importance of competition and has given great emphasis to policies aiming at the strengthening and expansion of competition. There are three policy areas: (a) the reduction of state aid so that competition is conducted on equal terms, (b) the control of market concentration, the prosecution of cartels and of dominant position abuse and (c) the introduction of competition to markets which were previously state monopolies (such as telecommunications and energy) or protected by national legislation (like many services).
As an EU member state, Cyprus has set up the appropriate institutions for the implementation of the above policies. But it is common belief that the level of competition in Cyprus is far from the desirable one. To some extent this can be explained by external factors such as the small market size and Cyprus’s geographic isolation, as well as its lack of competition culture. It is, however, unquestionable that the state has not paid the required attention to the promotion of competition. The purpose of this study is the assessment of government policy on competition issues, the identification of errors and omissions and the formulation recommendations for improving the relevant legislation and institutions.
The economic impact of climate change
Academic Advisor: Assistant Professor Theodoros Zachariadis
According to the estimates of international organizations, by the end of the 21st century, climate change will cause higher temperatures and less rainfall in Cyprus (and the Eastern Mediterranean in general). This ongoing project (lasting 3 years in total) will assess the economic impact of climate change on the agricultural sector in Cyprus.
The impact of foreign direct investment on sectors of the Cyprus economy
Academic Advisor: Dr. Christos S. Savva
Up until now there has been no comprehensive study to assess the exact quantitative impact of foreign direct investment on the growth rate of our economy. The purpose of this study is to present the data on foreign direct investment in Cyprus (by sector and by country of origin) and to estimate their impact on the growth of various sectors of the Cyprus economy.