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Are Combination Gas and Electric Utilities Multiproduct Natural Monopolies?

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  • Sing, Merrile

Abstract

Gas and electric services are provided in some locations by a single firm, in others by two firms. The loss of competition inherent in single-firm provision can be justified by the presence of both economies of scope and product-specific economies of scale for each output in multiproduct production. The estimation of a multiproduct, hybrid, translog cost function shows no evidence of such economies at the mean combination utility output vector. Copyright 1987 by MIT Press.

Suggested Citation

  • Sing, Merrile, 1987. "Are Combination Gas and Electric Utilities Multiproduct Natural Monopolies?," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 392-398, August.
    • Handle: RePEc:tpr:restat:v:69:y:1987:i:3:p:392-98
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    Cited by:

    1. Mehdi Farsi & Aurelio Fetz & Massimo Filippini, 2007. "Economies of Scale and Scope in the Swiss Multi-Utilities Sector," CEPE Working paper series 07-59, CEPE Center for Energy Policy and Economics, ETH Zurich.
    2. Farsi, Mehdi & Filippini, Massimo & Kuenzle, Michael, 2007. "Cost efficiency in the Swiss gas distribution sector," Energy Economics, Elsevier, vol. 29(1), pages 64-78, January.
    3. Ting-Kun Liu, 2011. "Local Monopoly, Network Effects And Technical Efficiency €“ Evidence From Taiwan’S Natural Gas Industry," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 5(1), pages 55-63.
    4. Christopher R. Knittel, 2003. "Market Structure and the Pricing of Electricity and Natural Gas," Journal of Industrial Economics, Wiley Blackwell, vol. 51(2), pages 167-191, June.
    5. Goto, Mika & Low, Angie & Makhija, Anil K., 2008. "Diversification, Productivity, and Financial Constraints Empirical Evidence from the US Electric Utility Industry," Working Paper Series 2008-3, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
    6. Fetz, Aurelio & Filippini, Massimo, 2010. "Economies of vertical integration in the Swiss electricity sector," Energy Economics, Elsevier, vol. 32(6), pages 1325-1330, November.
    7. John Kwoka, 2005. "Electric power distribution: economies of scale, mergers, and restructuring," Applied Economics, Taylor & Francis Journals, vol. 37(20), pages 2373-2386.
    8. Cullmann, Astrid & Stiel, Caroline, 2022. "Cost and productivity effects of demographic changes on local water service," Utilities Policy, Elsevier, vol. 79(C).
    9. Adam Fuller & Steven M. Smith, 2024. "Economies of Scope in the Water-Energy Nexus," Working Papers 2024-02, Colorado School of Mines, Division of Economics and Business.
    10. Farsi, Mehdi & Filippini, Massimo, 2009. "An analysis of cost efficiency in Swiss multi-utilities," Energy Economics, Elsevier, vol. 31(2), pages 306-315, March.
    11. Goto, Mika & Makhija, Anil K., 2007. "The Impact of Competition and Corporate Structure on Productive Efficiency: The Case of the U.S. Electric Utility Industry, 1990-2004," Working Paper Series 2007-10, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
    12. Karolis Andriuškevičius & Dalia Štreimikienė, 2021. "Developments and Trends of Mergers and Acquisitions in the Energy Industry," Energies, MDPI, vol. 14(8), pages 1-14, April.
    13. David S Saal & David Parker, 2000. "The impact of privatization and regulation on the water and sewerage industry in England and Wales: a translog cost function model," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(6), pages 253-268.

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