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Generating Efficiency: Economic and Environmental Regulation of Public and Private Electricity Generators in Spain

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Author Info

  • Pablo Arocena

    (Universidad Pública de Navarra)

  • Catherine Waddams Price

    (University of Warwick)

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    Abstract

    Economic regulation of firms with market power has placed increasing emphasis on incentive-based regulation such as price caps. We focus on the effect of regulation as distinct from ownership, and identify the effect of two different regulatory schemes on both publicly and privately owned Spanish electricity generators. Publicly owned generators were more efficient under cost of service regulation; private (but not public) firms responded to incentive regulation by increasing efficiency, bringing their productivity to similar levels. We introduce some novelty in modelling efficiency, including three pollutants and declared plant availability as outputs, and we test for the effect of environmental regulation in reducing pollutants

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    File URL: http://www.econ.ku.dk/cie/dp/dp_1997-1999/1999-09.pdf/
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    Bibliographic Info

    Paper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number 1999-09.

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    Length: 28 pages
    Date of creation: Jul 1999
    Date of revision:
    Handle: RePEc:kud:kuieci:1999-09

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    Related research

    Keywords: price cap regulation; total factor productivity; electricity;

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    References

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    1. De Fraja, Giovanni, 1993. "Productive efficiency in public and private firms," Journal of Public Economics, Elsevier, vol. 50(1), pages 15-30, January.
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    Cited by:
    1. Fare, Rolf & Grosskopf, Shawna & Zaim, Osman, 2002. "Hyperbolic efficiency and return to the dollar," European Journal of Operational Research, Elsevier, vol. 136(3), pages 671-679, February.
    2. Mota, R.L., 2004. "‘Comparing Brazil and USA electricity performance; what was the impact of privatisation?’," Cambridge Working Papers in Economics 0423, Faculty of Economics, University of Cambridge.

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