IDEAS home Printed from https://ideas.repec.org/a/wsi/serxxx/v68y2023i03ns0217590822500667.html
   My bibliography  Save this article

Electricity Market Liberalization And Efficiency: Evidence From Singapore

Author

Listed:
  • QU FENG

    (Economics Division, School of Social Sciences, Nanyang Technological University, 48 Nanyang Avenue, Singapore 639818)

  • SHIHAO ZHOU

    (Economics Division, School of Social Sciences, Nanyang Technological University, 48 Nanyang Avenue, Singapore 639818)

Abstract

Since 1995 Singapore has launched a series of reforms to liberalize its electricity market. More participants are introduced both in the power generation side as well as wholesale and retail markets to facilitate competition and promote efficiency. This paper aims to examine the efficiency of Singapore’s electricity market by detecting exceptionally high electricity prices as outliers. In particular, we first propose a dynamic regression model that accounts for market demand and supply, production cost, as well as time effects. Based on the regression, an upper bound is then constructed for the identification of outliers. Using a unique data set from 2003 to 2019, we find fewer outliers over time, indicating that Singapore’s electricity market becomes more efficient in recent years. We obtain consistent results by incorporating alternative model specifications such as hybrid model and Least Absolute Shrinkage and Selection Operator (LASSO). The results are also robust to different subsamples and data frequencies. In addition, a more comprehensive set of criterions for model selection is also proposed in this paper.

Suggested Citation

  • Qu Feng & Shihao Zhou, 2023. "Electricity Market Liberalization And Efficiency: Evidence From Singapore," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 68(03), pages 651-669, June.
    • Handle: RePEc:wsi:serxxx:v:68:y:2023:i:03:n:s0217590822500667
    DOI: 10.1142/S0217590822500667
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S0217590822500667
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S0217590822500667?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Market liberalization; electricity market; efficiency; USEP; outliers; LASSO;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:serxxx:v:68:y:2023:i:03:n:s0217590822500667. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/ser/ser.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.