A public-choice model is presented in order to explain the fact that publicly owned electricity utilities rarely price at marginal cost in practice. It is shown that if (1) government revenues are raised through proportional taxes, (2) median income is less than mean income, and (3) the share of a consumer's spending on electricity decreases with income, then the price resulting from a majority rule and universal voting is below marginal cost. The determination of a fixed subscription fee is also considered. Empirical evidence of the authors' results is obtained from pricing and consumption data for Hydro-Quebec.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 30 (1997) Issue (Month): 4 (November) Pages: 1204-19 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
Contact details of provider: Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4 Email: Web page: http://economics.ca/cje/ More information through EDIRC
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)