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Information Disclosure Policies: Evidence from the Electricity Industry

  • Magali Delmas
  • Maria Montes-Sancho
  • Jay P. Shimshack

A “third wave” of environmental policy has recently emerged that emphasizes information provision as an integral part of the risk mitigation strategy. While theory suggests information programs may correct market failures and improve welfare, the empirical effectiveness of these programs remains largely undetermined. We show that mandatory information disclosure programs in the electricity industry achieve stated policy goals. We that the average proportion of fossil fuels decreases and the average proportion of clean increases in response to disclosure programs. However, the programs also produce unintended consequences. Customer composition and pre-existing fuel mix significantly affect program response, suggesting that effective information disclosure policies may not be efficient.

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File URL: http://ase.tufts.edu/econ/research/documents/2007/shimshackDisclosure.pdf
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Paper provided by Department of Economics, Tufts University in its series Discussion Papers Series, Department of Economics, Tufts University with number 0707.

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Date of creation: 2007
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Handle: RePEc:tuf:tuftec:0707
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