Productivity throughout regulatory cycles in gas utilities

Ariel Casarin ()

Journal of Regulatory Economics, 2014, vol. 45, issue 2, 115-137

Abstract: This paper examines productivity patterns in price cap regulated utilities around price reviews. We specify a variable cost function that we estimate using alternative specifications of technical change. Results show that the pattern of pure technical change differs within and between regulatory cycles. They also provide evidence that exogenous investment reduces the ratchet-problem, that strategic cost cutting behavior is reduced when regulatory cycles are short and that, absent these two features, industry productivity is consistent with strategic cost cutting behavior. Copyright Springer Science+Business Media New York 2014

Keywords: Incentive regulation; Productivity; Ratchet effect; Gas utilities; L11; L51; L95 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:kap:regeco:v:45:y:2014:i:2:p:115-137

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DOI: 10.1007/s11149-013-9239-2

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