Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on U.S. Electric Generation Efficiency /
Markiewicz, Kira.
Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on U.S. Electric Generation Efficiency / Kira Markiewicz, Nancy L. Rose, Catherine Wolfram. - Cambridge, Mass. National Bureau of Economic Research 2004. - 1 online resource: illustrations (black and white); - NBER working paper series no. w11001 . - Working Paper Series (National Bureau of Economic Research) no. w11001. .
December 2004.
While neoclassical models assume static cost-minimization by firms, agency models suggest that firms may not minimize costs in less-competitive or regulated environments. We test this using a transition from cost-of-service regulation to market-oriented environments for many U.S. electric generating plants. Our estimates of input demand suggest that publicly-owned plants, whose owners were largely insulated from these reforms, experienced the smallest efficiency gains, while investor-owned plants in states that restructured their wholesale electricity markets improved the most. The results suggest modest medium-term efficiency benefits from replacing regulated monopoly with a market-based industry structure.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on U.S. Electric Generation Efficiency / Kira Markiewicz, Nancy L. Rose, Catherine Wolfram. - Cambridge, Mass. National Bureau of Economic Research 2004. - 1 online resource: illustrations (black and white); - NBER working paper series no. w11001 . - Working Paper Series (National Bureau of Economic Research) no. w11001. .
December 2004.
While neoclassical models assume static cost-minimization by firms, agency models suggest that firms may not minimize costs in less-competitive or regulated environments. We test this using a transition from cost-of-service regulation to market-oriented environments for many U.S. electric generating plants. Our estimates of input demand suggest that publicly-owned plants, whose owners were largely insulated from these reforms, experienced the smallest efficiency gains, while investor-owned plants in states that restructured their wholesale electricity markets improved the most. The results suggest modest medium-term efficiency benefits from replacing regulated monopoly with a market-based industry structure.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.