Rent Dissipation Through Electricity Prices of Publicly-Owned Utilities
AbstractA public-choice model is presented in order to explain the fact that publicly owned electricity utilities rarely price at marginal cost in practice. It is shown that if (1) government revenues are raised through proportional taxes, (2) median income is less than mean income, and (3) the share of a consumer's spending on electricity decreases with income, then the price resulting from a majority rule and universal voting is below marginal cost. The determination of a fixed subscription fee is also considered. Empirical evidence of the authors' results is obtained from pricing and consumption data for Hydro-Quebec.
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Bibliographic InfoPaper provided by Laval - Recherche en Energie in its series Papers with number 9512.
Length: 27 pages
Date of creation: 1995
Date of revision:
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ELECTRICITY; GOVERNMENT POLICY; PUBLIC GOODS; ENVIRONMENT;
Other versions of this item:
- Jean-Thomas Bernard & Michel Roland, 1997. "Rent Dissipation through Electricity Prices of Publicly Owned Utilities," Canadian Journal of Economics, Canadian Economics Association, vol. 30(4), pages 1204-19, November.
- BERNARD, Jean-Thomas & ROLAND, Michel, 1995. "Rent Dissipation Through Electricity Prices of Publicly-Owned Utilities," Cahiers de recherche 9512, Université Laval - Département d'économique.
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
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- Cetin, Tamer & Oguz, Fuat, 2007. "The politics of regulation in the Turkish electricity market," Energy Policy, Elsevier, vol. 35(3), pages 1761-1770, March.
- Bernard, Jean-Thomas, 1999.
"Le marché québécois de l’électricité : rétrospective et voies de l’avenir,"
Société Canadienne de Science Economique, vol. 75(4), pages 673-694, dÃ©cembre.
- Bernard, Jean-Thomas, 1999. "Le marché québécois de l'électricité: rétrospective et voies de l'avenir," Cahiers de recherche 9912, Université Laval - Département d'économique.
- C. Robert Clark & Andrew Leach, 2007. "The Potential for Electricity Market Restructuring in Quebec," Canadian Public Policy, University of Toronto Press, vol. 33(1), pages 1-20, March.
- Pierre-Olivier Pineau, 2008. "Electricity Subsidies in Low-Cost Jurisdictions: The Case of British Columbia," Canadian Public Policy, University of Toronto Press, vol. 34(3), pages 379-394, September.
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