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HAS ELECTRICITY REGULATION RESULTED IN HIGHER PRICES? AN ECONOMETRIC EVALUATION UTILIZING A CALIBRATED REGULATORY INPUT VARIABLE
Author(s) -
MOORE CHARLES GUY
Publication year - 1975
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1975.tb00988.x
Subject(s) - economics , subsidy , variable (mathematics) , measure (data warehouse) , universalization , electricity , econometrics , control variable , control (management) , microeconomics , computer science , economy , engineering , mathematics , market economy , mathematical analysis , management , database , machine learning , electrical engineering
The universalization of regulation has made it impossible to measure its effectiveness using traditional techniques. Researchers have used dummy variables, however, the spread of regulation has gradually eliminated the control group of unregulated firms needed for this technique. This explains why Stigler and Friedland (1962) concluded their study with 1937 data. The calibrated regulatory variable technique introduced here, on the other hand, can measure the effectiveness of regulation even when it is a universal condition. We find that electricity regulation raised prices during the period 1947–1966. A politically‐motivated, naive policy designed to cross‐subsidize residential users may have contributed to this failure.