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Electricity prices as signals for the evaluation of reforms: an empirical analysis of four European countries

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  • Massimo Florio

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Abstract

The paper considers price trends as signals for the evaluation of reforms leading to ownership or market structure changes in public services. In order to do so, we focus on a specific example: electricity prices in four countries, namely UK, France, Germany and Italy. We consider that these countries offer a natural experiment in different patterns of public/privateownership and liberalisation of electricity industry. We use price changes as a signal and observe that there is no clear dominance of one pattern in terms of welfare change for the representative consumer. This conclusion tends to reject the widely held idea that one specific "orthodox" pattern should bepreferred: privatisation with liberalisation and vertical disintegration. The empirical evidence does not sustain any strong claim of superiority of such a pattern.

Suggested Citation

  • Massimo Florio, 2003. "Electricity prices as signals for the evaluation of reforms: an empirical analysis of four European countries," Departmental Working Papers 2003-14, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  • Handle: RePEc:mil:wpdepa:2003-14
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    File URL: http://wp.demm.unimi.it/files/wp/2003/DEMM-2003_014wp.pdf
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    References listed on IDEAS

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    1. Paolo Liberati, 2005. "UK Privatization and Household Welfare," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 61(2), pages 220-220, July.
    2. Rafael La Porta & Florencio López-de-Silanes, 1999. "The Benefits of Privatization: Evidence from Mexico," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1193-1242.
    3. Rinaldo Brau & Massimo Florio, 2004. "Privatisations as price reforms: Evaluating consumers' welfare changes in the U.K," Annals of Economics and Statistics, GENES, issue 75-76, pages 109-133.
    4. David M. Newbery, 2002. "Privatization, Restructuring, and Regulation of Network Utilities," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262640481, January.
    5. Faye Steiner, 2000. "Regulation, Industry Structure and Performance in the Electricity Supply Industry," OECD Economics Department Working Papers 238, OECD Publishing.
    6. Jamasb, T. & Pollitt, M., 2004. "Electricity Market Reform in the European Union: Review of progress towards liberalisation and integration," Cambridge Working Papers in Economics 0471, Faculty of Economics, University of Cambridge.
    7. Domah, P. & Pollitt, M.G., 2000. "The Restructuring and Privatisation of Electricity Distribution and Supply Businesses in England and Wales: A Social Cost Benefit Analysis," Cambridge Working Papers in Economics 0007, Faculty of Economics, University of Cambridge.
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    Citations

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    Cited by:

    1. Erdogdu, Erkan, 2011. "The impact of power market reforms on electricity price-cost margins and cross-subsidy levels: A cross country panel data analysis," Energy Policy, Elsevier, vol. 39(3), pages 1080-1092, March.
    2. Pickl, Matthias & Wirl, Franz, 2011. "Auction design for gas pipeline transportation capacity--The case of Nabucco and its open season," Energy Policy, Elsevier, vol. 39(4), pages 2143-2151, April.
    3. Poggi, Ambra & Florio, Massimo, 2010. "Energy deprivation dynamics and regulatory reforms in Europe: Evidence from household panel data," Energy Policy, Elsevier, vol. 38(1), pages 253-264, January.
    4. Hyland, Marie, 2016. "Restructuring European electricity markets – A panel data analysis," Utilities Policy, Elsevier, vol. 38(C), pages 33-42.
    5. Judith Clifton & Daniel Díaz-Fuentes, 2010. "Evaluating Eu Policies On Public Services: A Citizens' Perspective," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 81(2), pages 281-311, June.
    6. Erdogdu, Erkan, 2013. "Essays on Electricity Market Reforms: A Cross-Country Applied Approach," MPRA Paper 47139, University Library of Munich, Germany.
    7. Gugler, Klaus & Rammerstorfer, Margarethe & Schmitt, Stephan, 2013. "Ownership unbundling and investment in electricity markets — A cross country study," Energy Economics, Elsevier, vol. 40(C), pages 702-713.

    More about this item

    Keywords

    Electricity Industry; Tariffs; Public Services; Utilities Reforms;

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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