An average household at the bottom 20% of the income distribution spends an extra 1,166 shekels a year on food expenditure due to agricultural subsidies. According to a new study by the Jerusalem Institute for Market Studies (JIMS), reducing indirect support to agriculture could save Israeli consumers up to 3 billion Shekels annually.
Bank Leumi earned NIS 3.7 billion in banking fees in 2011, with approximately 1.5 million customers. At the same time, internet bank ING Direct, with ten times as many customers (16.7 million) spread over many countries, turned a good profit while demanding only one quarter of that amount in bank fees. JIMS compared the Israeli banking system with different internet banks around the world and concluded that Israeli consumers would be well served if local regulators would allow internet banking in Israel.
Various Israeli MKs are calling for price controls and state regulation of author contracts and book sales. JIMS' Position Paper shows a link between a recent boom in Israeli publishing and increased competition, and surveys the harm caused by state regulation wherever it is found abroad.
Without competition, most israeli homeowners overpay for cooking gas lack of competition in the home cooking gas industry in Israel causes israeli consumers to spend approximately NIS 150 million more than necessary for gas.
JIMS economist Keren Harel-Harrari shows that since January 2008, “the price paid by consumers for cottage cheese has risen ten times as fast as the price dairy producers have had to pay farmers for the milk they use.” Harel-Harrari explains that this is evidence the producers – Tnuva, Strauss and Tara – are effectively acting as a cartel would act.
The paper explains that the industry in Israel is plagued with bad policy and intentional misdeeds: “In the past, a state-backed agency awarded seals of quality approval without establishing any system for examining the products; then it awarded ‘stamps of approval’ to inferior oils without explaining the difference. Last month the ministry of health found that 16 companies were selling substandard oil. The Chief Rabbinate even had to issue a warning before the Hanukkah holiday about using substandard oil.
"Car Insurance: Market Failure or Over Regulation?" examines the market for automobile property insurance and suggests ways of improving its functioning. After surveying the characteristics of the market, it concluded that tight and inefficient regulation puts barriers to entry, raises premiums and prevents companies to compete.
Hana Dar Strauvits
In light of the impending sale of 15% of the shares of the ports of Ashdod and Haifa to private parties, JIMS assessed the economic feasibility of partial privatization. Unfortunately, JIMS' findings show that the continued degradation of the ports' management over the last few years has greatly reduced the attractiveness of the ports. The lack of economic efficiency is clear the number of workers has increased by around 9% over the past few years and the volume of economic activity has been at best stagnant.
The average price of honey in the United States is 28% of the average price in Israel. JIMS notes honey is also twice as expensive as it is in England, while Canada, Mexico, Argentina and China offer honey for export at 15% the price of Israeli honey. The reasons for the high cost of honey are government policy and over-centralization of the industry.