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Competition and switching in public service markets: Can they reduce inequalities?
Author(s) -
FernándezGutiérrez Marcos,
James Oliver,
Jilke Sebastian
Publication year - 2017
Publication title -
regulation and governance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.417
H-Index - 45
eISSN - 1748-5991
pISSN - 1748-5983
DOI - 10.1111/rego.12110
Subject(s) - competition (biology) , context (archaeology) , inequality , welfare state , service (business) , business , convergence (economics) , economics , welfare , european union , public economics , public service , industrial organization , international economics , market economy , marketing , economic growth , public relations , political science , mathematical analysis , ecology , paleontology , mathematics , politics , law , biology
Regulatory reforms to public infrastructure services across European Union (EU) countries were aimed at increasing consumer welfare by introducing competition and choice into service markets. However, empirical evaluations have questioned whether these reforms have benefitted all consumers, suggesting that vulnerable groups of service users (especially those with lower levels of formal education), might be locked into poorly performing services. We assess the relationship between the level of competition in electricity and fixed telephony markets in EU countries and evaluate the affordability of these services for different socio‐educational layers. Our findings show that – although in countries where there is a relatively high frequency of switching, inequalities between socio‐educational groups are smaller and eventually disappear – competition as such does not play a part. These results suggest that demand‐side regulation that successfully enables consumer switching has the potential to equalize social welfare, thereby reflecting a possible convergence of regulatory instruments and the central aims of the welfare state in this context.