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Market Structure and the Pricing of Electricity and Natural Gas
Author(s) -
Knittel Christopher R.
Publication year - 2003
Publication title -
the journal of industrial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.93
H-Index - 77
eISSN - 1467-6451
pISSN - 0022-1821
DOI - 10.1111/1467-6451.00197
Subject(s) - electricity , natural gas , electricity market , dual (grammatical number) , natural monopoly , electricity retailing , economics , market structure , business , natural gas prices , commerce , industrial organization , microeconomics , monopoly , chemistry , engineering , art , literature , organic chemistry , electrical engineering
US Electricity and natural gas markets have traditionally been serviced by one of two market structures. In some markets, electricity and natural gas are sold by a regulated dual‐product monopolist, while in other markets, electricity and natural gas are sold by separate regulated single‐product monopolies. I analyze whether electricity and natural gas prices depend on the market structure and compare these results to the predictions of a number of theories. The results are most consistent with the political economy theories suggesting that regulators respond to interest group activity.