Efficient versus "Popular" Tariffs for Regulated Monopolies

Thomas Beard and Henry Thompson

The Journal of Business, 1996, vol. 69, issue 1, 75-87

Abstract: This article analyzes the effects of the popular election of a monopoly regulator on the structure of the resulting price system. Consumers are differentiated by income and vote on a regulator who implements a two-part tariff for all consumers. The structure of the winning tariff depends on the curvature properties of consumer Engel curves. When Engel curves are concave in wealth or income, the most popular tariff involves an excessive fixed charge and pricing below marginal cost. This result contributes to understanding observed anomalies in public utility pricing. Generalizations and extensions of the analysis are discussed. Copyright 1996 by University of Chicago Press.

Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://dx.doi.org/10.1086/209680 full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
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:ucp:jnlbus:v:69:y:1996:i:1:p:75-87

Access Statistics for this article

More articles in The Journal of Business from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().