Premium
THE IMPACT OF UTILITY DEREGULATION IN ARIZONA
Author(s) -
MACFIE BRIAN P.
Publication year - 2008
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.2007.00083.x
Subject(s) - deregulation , economics , ordinary least squares , investment (military) , competition (biology) , electric utility , microeconomics , econometrics , industrial organization , macroeconomics , engineering , ecology , electrical engineering , politics , biology , political science , law
This analysis assesses Arizona’s short‐run price response to utility energy deregulation in the commercial and industrial sectors and the long‐term response to deregulated industrial utility prices. Using a standard utility industry approach, ordinary least squares regression confirms commercial/industrial utility prices remain inelastic and Arizona’s deregulation efforts have not effectively promoted short‐run price competition. Moreover, widening differences in utility rates could be a response to a stronger long‐run price elastic effect across states. The findings suggest states not aggressively deregulating utility price to narrow artificial comparative price advantages could be at a competitive disadvantage for interstate manufacturing investment. ( JEL Q41, Q48, Q40)