The comparative advantage of public ownership: evidence from U.S. electric utilities
AbstractStudies of the performance effects of public vs private ownership have found mixed evidence. This paper draws on theory suggesting that public enterprise may have an advantage in producing goods and services whose quality attributes are difficult to specify a priori. Using a comprehensive data set of U.S. electric utilities to estimate cost functions, we find that while privately owned systems achieve lower costs in generation, public systems generally have an advantage in the end-user-oriented distribution function with its more non-contractible quality attributes. Other evidence on quality differences by ownership type and by enterprise size supports this distinction.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 38 (2005)
Issue (Month): 2 (May)
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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
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Find related papers by JEL classification:
- L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
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