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Costs, Technology And Ownership Form Of Natural Gas Distribution In Italy

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Abstract

The analysis of the technology and costs of the gas distribution networks highlights that the number of customers is more important than the amount of gas delivered, as well as the absence of economies of scale, the presence of economies of density and the significant role of the morphologic and demographic variables. The diversification towards other services, such as water and electricity, provides good opportunities for efficiency. The lower costs for private operators and the constant economies of scale indicate that the privatisation process should continue and confirm the benefits of having many operators (yardstick competition). The control of monopoly rents in efficient conditions requires the use of a tariff system similar to a price-cap, provided that it takes into account the territorial constraints.

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  • Giovanni Fraquelli & Roberto Giandrone, 1997. "Costs, Technology And Ownership Form Of Natural Gas Distribution In Italy," CERIS Working Paper 199713, Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY -NOW- Research Institute on Sustainable Economic Growth - Moncalieri (TO) ITALY.
  • Handle: RePEc:csc:cerisp:199713
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    1. Daniel R. Hollas & Stanley R. Stansell, 1991. "Regulation, Ownership Form, And The Economic Efficiency Of Rural Electric Distribution Cooperatives," The Review of Regional Studies, Southern Regional Science Association, vol. 21(2), pages 201-220, Summer.
    2. Randy A. Nelson. & Walter J. Primeaux, Jr., 1988. "The Effects of Competition on Transmission and Distribution Costs in the Municipal Electric Industry," Land Economics, University of Wisconsin Press, vol. 64(4), pages 338-346.
    3. Daniel R. HOLLAS & Stanley R. STANSELL, 1994. "The Economic Efficiency Of Public Vs. Private Gas Distribution Utilities," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 65(2), pages 281-300, April.
    4. Mark J. Roberts, 1986. "Economies of Density and Size in the Production and Delivery of Electric Power," Land Economics, University of Wisconsin Press, vol. 62(4), pages 378-387.
    5. Klein, Christopher C., 1993. "A comparison of cost-based pricing rules for natural gas distribution utilities," Energy Economics, Elsevier, vol. 15(3), pages 176-182, July.
    6. Baumol, William J, 1977. "On the Proper Cost Tests for Natural Monopoly in a Multiproduct Industry," American Economic Review, American Economic Association, vol. 67(5), pages 809-822, December.
    7. Guldmann, Jean-Michel, 1983. "Modeling the structure of gas distribution costs in urban areas," Regional Science and Urban Economics, Elsevier, vol. 13(3), pages 299-316, August.
    8. John C. Panzar & Robert D. Willig, 1977. "Economies of Scale in Multi-Output Production," The Quarterly Journal of Economics, Oxford University Press, vol. 91(3), pages 481-493.
    9. Guldmann, Jean-Michel, 1984. "A further note on the structure of gas distribution costs in urban areas," Regional Science and Urban Economics, Elsevier, vol. 14(4), pages 583-588, November.
    10. Panzar, John C & Willig, Robert D, 1981. "Economies of Scope," American Economic Review, American Economic Association, vol. 71(2), pages 268-272, May.
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    More about this item

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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