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Retail power market competition with endogenous entry decision—An auction data analysis

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  • Hosoe, Nobuhiro
  • Takagi, Shingo

Abstract

Deregulation in the electric power industry has been aimed at promoting competition and thereby enhancing the industry’s efficiency. We use the auction data of public power procurements to study the impact of the reform on the retail power market in Japan. We quantify this impact by measuring a decline in power charges, controlling for the endogeneity bias caused by the entrants’ bid-submission decisions. Our results suggest that power charges would decline by about 0.48yen/kWh on average when two or more providers bid at an auction.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of the Japanese and International Economies.

Volume (Year): 26 (2012)
Issue (Month): 3 ()
Pages: 351-368

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Handle: RePEc:eee:jjieco:v:26:y:2012:i:3:p:351-368

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Web page: http://www.elsevier.com/locate/inca/622903

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Keywords: Electric power industry; Auction data; Public procurement; Sample selection bias;

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