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Utilities deprivation dynamics and energy sector reforms in seven European countries

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  • Ambra POGGI

    ()

  • Massimo FLORIO

    ()

Abstract

In the late 1990s many European countries started comprehensive restructuring of their energy industries. The typical ingredients of the reforms are full or partial privatization, vertical disintegration, liberalization. In this paper we focus on the way in which energy sector reforms affect social affordability. The aim of this paper is to analyze the effects of energy reforms on the household probability of experiencing utilities deprivation (that is, to be unable to pay scheduled utility bills) in seven European Countries: Denmark, Belgium, France, Ireland, Italy, Netherlands and Spain. The period of analysis is 1994-2001. We also explore the dynamics of utilities deprivations focusing on the causes behind deprivation persistence. We differentiate between household heterogeneity and true state dependence. Then, controlling for observed and unobserved heterogeneity, we use the magnitude of average partial effects to investigate the relevance of any state dependence and the impact of energy sector reforms on the probability of experiencing utilities deprivations and on state dependence. We find evidence that vertical disintegration in the energy sector and privatization increase the household probability of experiencing utilities deprivation. Moreover, vertical disintegration also increases the household persistence in the status of deprivation.

Suggested Citation

  • Ambra POGGI & Massimo FLORIO, 2008. "Utilities deprivation dynamics and energy sector reforms in seven European countries," Departmental Working Papers 2008-20, Department of Economics, Management and Quantitative Methods at Universit√† degli Studi di Milano.
  • Handle: RePEc:mil:wpdepa:2008-20
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    File URL: http://wp.demm.unimi.it/files/wp/2008/DEMM-2008_020wp.pdf
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    Keywords

    Deprivation; utilities; privatization; liberalization; vertical disintegration; true state persistence;

    JEL classification:

    • L97 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Utilities: General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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