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Income, demand and privatization

Author

Listed:
  • Corrado Benassi

    (Alma Mater Sudiorum - Università di Bologna)

  • Alessandra Chirco

    (Università del Salento)

  • Caterina Colombo

    (Università degli Studi di Ferrara)

Abstract

The question raised in this paper is whether and how some core features of income distribution, e.g. the income levels or income inequality, should be relevant in the decision to privatize public firms. The paper provides a first answer in the framework of mixed oligopoly theory. In particular, we show that the scope for privatization is widened when the market is poorer, and when incomes become more concentrated. These unexpected results are accounted for in terms of the way distributional shocks alter the allocative inefficiency of imperfectly competitive markets.

Suggested Citation

  • Corrado Benassi & Alessandra Chirco & Caterina Colombo, 2025. "Income, demand and privatization," Journal of Economics, Springer, vol. 145(2), pages 129-145, July.
    • Handle: RePEc:kap:jeczfn:v:145:y:2025:i:2:d:10.1007_s00712-025-00899-w
    DOI: 10.1007/s00712-025-00899-w
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