Markiewicz, Kira. <br/><br/>
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. .
<br/><br/> December 2004. 
<br/><br/> 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. 
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