Determinants of the Requested Rate of Return and the Rate of Return Granted in a Formal Regulatory Process
AbstractThis paper contains further analysis of the questions discussed in two papers by Joskow concerning what rate of return a regulated firm will request and what rate of return it will be granted in a formal regulatory process. Using Florida data, this paper extends Joskow's approach by examining both the selectivity and the simultaneity of the rate of return requested and the rate of return granted. Both a "probit two-stage least squares" and a "tobit two-stage least squares" model are estimated and the results differ significantly from the OLS estimates.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal Bell Journal of Economics.
Volume (Year): 9 (1978)
Issue (Month): 2 (Autumn)
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Web page: http://www.rje.org
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- Wayne Y. Lee & Anjan V. Thakor, 2004. "Regulatory Pricing and Capital Investment under Asymmetric Information about Cost," Finance 0411022, EconWPA.
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