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Does Liberalisation cause more Electricity Blackouts? Evidence from a Global Study of Newspaper Reports

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  • Yu, W.
  • Pollitt, M.G.

Abstract

There is a public perception that electricity liberalisation is the major cause of recent electricity blackouts. This is reflected in the newspaper reporting of blackouts. By contrast, it was not listed as a cause in any official investigation reports. In this paper, we examine the common causes of a number of large blackouts worldwide by applying the qualitative content analysis technique to different investigation reports. We generate a regional blackout dataset, spanning European, Latin American and Asian regions, by using news articles derived from the Factiva database. We use the random effects model and sample means techniques in a detailed examination of the effect of liberalisation and regional factors on the number of ‘small’ electricity blackouts between 1998 and 2007. The results indicate that, contrary to what we might expect, liberalisation does not have a significant statistical effect on the frequency of small blackouts. The perception that there is an increase in the number of blackouts after liberalisation seems to be shaped by the media’s reporting of individual ‘large’ incidents rather than the number of incidents reported.

Suggested Citation

  • Yu, W. & Pollitt, M.G., 2009. "Does Liberalisation cause more Electricity Blackouts? Evidence from a Global Study of Newspaper Reports," Cambridge Working Papers in Economics 0911, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:0911
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    References listed on IDEAS

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    Cited by:

    1. Anna Pechan, 2014. "Which Incentives Does Regulation Give to Adapt Network Infrastructure to Climate Change? - A German Case Study," Working Papers V-365-14, University of Oldenburg, Department of Economics, revised May 2014.
    2. Daisy Shen & Qing Yang, . "Electricity Market Regulatory Reform and Competition – Case Study of the New Zealand Electricity Market," Chapters, Economic Research Institute for ASEAN and East Asia (ERIA).
    3. Sylvia Gaylord & Kathleen J. Hancock, 2013. "Developing world: national energy strategies," Chapters,in: International Handbook of Energy Security, chapter 10, pages 206-236 Edward Elgar Publishing.
    4. Karim L. Anaya & Michael G. Pollitt, 2014. "Does Weather Have an Impact on Electricity Distribution Efficiency? Evidence from South America," Cambridge Working Papers in Economics 1424, Faculty of Economics, University of Cambridge.

    More about this item

    Keywords

    power outage; electricity blackouts; liberalisation;

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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