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Productivity throughout regulatory cycles in gas utilities

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  • Ariel Casarin

Abstract

This paper examines productivity patterns in price cap regulated utilities around price reviews. We specify a variable cost function that we estimate using alternative specifications of technical change. Results show that the pattern of pure technical change differs within and between regulatory cycles. They also provide evidence that exogenous investment reduces the ratchet-problem, that strategic cost cutting behavior is reduced when regulatory cycles are short and that, absent these two features, industry productivity is consistent with strategic cost cutting behavior. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Ariel Casarin, 2014. "Productivity throughout regulatory cycles in gas utilities," Journal of Regulatory Economics, Springer, vol. 45(2), pages 115-137, April.
    • Handle: RePEc:kap:regeco:v:45:y:2014:i:2:p:115-137
    DOI: 10.1007/s11149-013-9239-2
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    Cited by:

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    2. Gugler, Klaus & Liebensteiner, Mario, 2019. "Productivity growth and incentive regulation in Austria's gas distribution," Energy Policy, Elsevier, vol. 134(C).

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    More about this item

    Keywords

    Incentive regulation; Productivity; Ratchet effect ; Gas utilities; L11; L51; L95;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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