Effects of Privatization on Price and Labor Efficiency: The Swedish Electricity Distribution Sector

Erik Lundin

No 1139, Working Paper Series from Research Institute of Industrial Economics

Abstract: I examine the effects of privatization, in the form of acquisitions, in the Swedish electricity distribution sector. As the majority of the distribution networks remained publicly owned, I use a synthetic control method to identify the effects on price and labor efficiency. In comparison to their synthetic counterparts, I find that the acquired networks increased labor efficiency by on average 18 percent, while no effect is found on the price. Thus, the evidence suggests substantial efficiency gains but that these are not fed through to consumer prices. Since each acquisition involved several bordering networks that were separately operated by each municipality prior to the acquisitions, I examine to what extent the efficiency gains are likely to be driven by increased economies of scale. Results suggest that the entire effect can be explained by increased economies of scale, questioning the causal effect of privatization per se.

Keywords: Incentive regulation; Electricity distribution; Natural monopoly; Norm model regulation; Privatization; Acquisitions (search for similar items in EconPapers)
JEL-codes: L33 L52 L94 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2016-11-03
New Economics Papers: this item is included in nep-eff, nep-ene and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.ifn.se/wfiles/wp/wp1139.pdf (application/pdf)

Related works:
Journal Article: Effects of Privatization on Price and Labor Efficiency: The Swedish Electricity Distribution Sector (2020)
Journal Article: Effects of Privatization on Price and Labor Efficiency: The Swedish Electricity Distribution Sector (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1139

Access Statistics for this paper

More papers in Working Paper Series from Research Institute of Industrial Economics Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Elisabeth Gustafsson ().