Ownership Unbundling of Gas Transmission Networks - Empirical Evidence
AbstractThe European Commission has intensively discussed the mandatory separation of natural gas transmission from production and services. However, economic theory is ambiguous on the price eﬀects of vertical separation. In this paper, we empirically analyse the eﬀect of ownership unbundling of gas transmission networks as the strongest form of vertical separation on the level of end-user prices. Therefore, we apply diﬀerent dynamic estimators as system GMM and the bias-corrected least-squares dummy variable or LSDVC estimator on an unbalanced panel out of 18 EU countries over 19 years, allowing us to avoid the endogeneity problem and to estimate the long-run eﬀects of regulation. We introduce a set of regulatory indicators as market entry regulation, ownership structure, vertical separation and market structure and account for structural and economic country speciﬁcs. Among these diﬀerent estimators, we consistently ﬁnd that ownership unbundling has no impact on natural gas end-user prices, while the more modest legal unbundling reduces them signiﬁcantly. Furthermore, third-party access, market structure and privatisation show signiﬁcant inﬂuence with the latter leading to higher price levels.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Energiewirtschaftliches Institut an der Universitaet zu Koeln in its series EWI Working Papers with number 2011-7.
Length: 21 pages
Date of creation: 20 Jul 2011
Date of revision:
Contact details of provider:
Postal: Vogelsanger Str. 321, Alte Wagenfabrik, 50827 Köln
Phone: ++ 49 (0) 221 277 29 100
Fax: ++ 49 (0) 221 277 29 400
Web page: http://www.ewi.uni-koeln.de/
More information through EDIRC
Natural gas; Networks; Regulation; Ownership unbundling; Panel data;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-08-29 (All new papers)
- NEP-COM-2011-08-29 (Industrial Competition)
- NEP-CWA-2011-08-29 (Central & Western Asia)
- NEP-ENE-2011-08-29 (Energy Economics)
- NEP-EUR-2011-08-29 (Microeconomic European Issues)
- NEP-NET-2011-08-29 (Network Economics)
- NEP-REG-2011-08-29 (Regulation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Blundell, Richard & Bond, Stephen, 1998.
"Initial conditions and moment restrictions in dynamic panel data models,"
Journal of Econometrics,
Elsevier, vol. 87(1), pages 115-143, August.
- Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
- R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
- Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
- Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, December.
- Guillaume L'Hegaret & Boriss Siliverstovs & Christian von Hirschhausen, 2004.
"International Market Integration for Natural Gas? A Cointegration Analysis of Prices in Europe, North America and Japan,"
0402, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
- Siliverstovs, Boriss & L'Hegaret, Guillaume & Neumann, Anne & von Hirschhausen, Christian, 2005. "International market integration for natural gas? A cointegration analysis of prices in Europe, North America and Japan," Energy Economics, Elsevier, vol. 27(4), pages 603-615, July.
- Guillaume L¿Hégaret & Boriss Siliverstovs & Anne Neumann & Christian von Hirschhausen, 2003. "International Market Integration for Natural Gas?: A Cointegration Analysis of Prices in Europe, North America and Japan," Discussion Papers of DIW Berlin 393, DIW Berlin, German Institute for Economic Research.
- Felix Höffler & Sebastian Kranz, 2007. "Legal Unbundling can be a Golden Mean between Vertical Integration and Separation," Bonn Econ Discussion Papers bgse15_2007, University of Bonn, Germany.
- Hattori, Toru & Tsutsui, Miki, 2004. "Economic impact of regulatory reforms in the electricity supply industry: a panel data analysis for OECD countries," Energy Policy, Elsevier, vol. 32(6), pages 823-832, April.
- Paul Conway & Giuseppe Nicoletti, 2006. "Product Market Regulation in the Non-Manufacturing Sectors of OECD Countries: Measurement and Highlights," OECD Economics Department Working Papers 530, OECD Publishing.
- Buehler, Stefan & Schmutzler, Armin & Benz, Men-Andri, 2004.
"Infrastructure quality in deregulated industries: is there an underinvestment problem?,"
International Journal of Industrial Organization,
Elsevier, vol. 22(2), pages 253-267, February.
- Stefan Buehler & Armin Schmutzler & Men-Andri Benz, 2002. "Infrastructure Quality in Deregulated Industries: Is there an Underinvestment Problem?," SOI - Working Papers 0209, Socioeconomic Institute - University of Zurich.
- Benz, Men-Andri & Bühler, Stefan & Schmutzler, Armin, 2003. "Infrastructure Quality in Deregulated Industries: Is there an Underinvestment Problem?," CEPR Discussion Papers 3836, C.E.P.R. Discussion Papers.
- Alberto Alesina & Silvia Ardagna & Giuseppe Nicoletti & Fabio Schiantarelli, 2003.
"Regulation and Investment,"
OECD Economics Department Working Papers
352, OECD Publishing.
- Alesina, Alberto F & Ardagna, Silvia & Nicoletti, Giorgio & Schiantarelli, Fabio, 2003. "Regulation and Investment," CEPR Discussion Papers 3851, C.E.P.R. Discussion Papers.
- Alberto Alesina & Silvia Ardagna & Giuseppe Nicoletti & Fabio Schiantarelli, 2002. "Regulation and Investment," Boston College Working Papers in Economics 549, Boston College Department of Economics.
- Alberto Alesina & Silvia Ardagna & Giuseppe Nicoletti & Fabio Schiantarelli, 2003. "Regulation and Investment," NBER Working Papers 9560, National Bureau of Economic Research, Inc.
- Nicoletti, Giuseppe & Ardagna, Silvia & Alesina, Alberto & Schiantarelli, Fabio, 2005. "Regulation and Investment," Scholarly Articles 2579825, Harvard University Department of Economics.
- Stefan Buehler & Dennis Gärtner & Daniel Halbheer, 2006.
"Deregulating Network Industries: Dealing with Price-quality Tradeoffs,"
Journal of Regulatory Economics,
Springer, vol. 30(1), pages 99-115, 07.
- Stefan Buehler & Dennis Gaertner & Daniel Halbheer, 2004. "Deregulating Network Industries: Dealing with Price-Quality Tradeoffs," SOI - Working Papers 0402, Socioeconomic Institute - University of Zurich, revised Oct 2005.
- Stephen P. A. Brown & Mine K. Yücel, 2007.
"What drives natural gas prices?,"
0703, Federal Reserve Bank of Dallas.
- Giovanni S.F. Bruno, 2004.
"Approximating the Bias of the LSDV Estimator for Dynamic Unbalanced Panel Data Models,"
KITeS Working Papers
159, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2004.
- Bruno, Giovanni S.F., 2005. "Approximating the bias of the LSDV estimator for dynamic unbalanced panel data models," Economics Letters, Elsevier, vol. 87(3), pages 361-366, June.
- Carlo Cambini & Laura Rondi, 2010. "Incentive regulation and investment: evidence from European energy utilities," Journal of Regulatory Economics, Springer, vol. 38(1), pages 1-26, August.
- Maurice J.G. Bun & Jan F. Kiviet, 2002.
"On the Diminishing Returns of Higher-order Terms in Asymptotic Expansions of Bias,"
Tinbergen Institute Discussion Papers
02-099/4, Tinbergen Institute, revised 24 Oct 2002.
- Bun, Maurice J. G. & Kiviet, Jan F., 2003. "On the diminishing returns of higher-order terms in asymptotic expansions of bias," Economics Letters, Elsevier, vol. 79(2), pages 145-152, May.
- Rinaldo Brau & Raffaele Doronzo & Carlo V. Fiorio & Massimo Florio, 2010. "EU Gas Industry Reforms and Consumers' Prices," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 167-182.
- Stefan Buehler, 2005. "The Promise and Pitfalls of Restructuring Network Industries," German Economic Review, Verein für Socialpolitik, vol. 6(2), pages 205-228, 05.
- Kiviet, Jan F., 1995.
"On bias, inconsistency, and efficiency of various estimators in dynamic panel data models,"
Journal of Econometrics,
Elsevier, vol. 68(1), pages 53-78, July.
- Tom Doan, . "LSDVC: RATS procedure to estimate a dynamic FE model with correction for bias," Statistical Software Components RTS00111, Boston College Department of Economics.
- Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January.
- M. Florio & R. Brau & R. Doronzo, 2008. "Gas industry reforms and consumers' prices in the European Union," Working Paper CRENoS 200816, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
- Testa, Federico & Stagnaro, Carlo, 2011.
"Reti di trasporto nazionale e concorrenza nei mercati del gas: il caso Eni-Snam Rete Gas
[Networks and competition in natural gas markets: the case of Eni-Snam Rete Gas]," MPRA Paper 48698, University Library of Munich, Germany.
- Isabel Soares & Paula Sarmento, 2012. "Unbundling in the Telecommunications and the Electricity Sectors: How Far should it Go?," European Research Studies Journal, European Research Studies Journal, vol. 0(Special I), pages 157-194.
- Tsatsos, Aristidis, 2012.
"Die Liberalisierung des russischen Gassektors: 3 Szenarios?
[The liberalisation of the Russian gas sector: 3 scenarios?]," MPRA Paper 44623, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Monika Schmid).
If references are entirely missing, you can add them using this form.