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The impact of productive efficiency and quality of a regulated local public utility on final goods prices

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Abstract

In this note we reconstruct the process by a which the decisions of a regulated local public utility, in terms of productive efficiency and quality of the service provided, impact on prices of final consumption goods, supplied in a oligopolistic market operating in the same geographic area. We obtain some formula for these effects which can be quantified by estimating firms’ conditional input demand function of the public service and firms’ inverse demand function for the public good, non-rival, component of this.

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Paper provided by Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa in its series Working Papers - Economics with number wp2007_06.

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Length: 12 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:frz:wpaper:wp2007_06

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Keywords: regulation; x-efficiency; oligopoly;

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  1. BEHRENS, Kristian & THISSE, Jacques-François, . "Regional economics: a new economic geography perspective," CORE Discussion Papers RP -1946, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Bennett, John & Elisabetta Iossa, 2002. "Building and Managing Facilities for Public Services," Royal Economic Society Annual Conference 2002 22, Royal Economic Society.
  3. Mark Armstrong & David Sappington, 2005. "Regulation, Competition and Liberalization," Industrial Organization 0505011, EconWPA, revised 07 Oct 2005.
  4. Graeme Guthrie, 2006. "Regulating Infrastructure: The Impact on Risk and Investment," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 925-972, December.
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