TY  - JOUR
AU  - Markiewicz,Kira
AU  - Rose,Nancy L.
AU  - Wolfram,Catherine
TI  - Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on U.S. Electric Generation Efficiency
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11001
PY  - 2004
Y2  - December 2004
UR  - http://www.nber.org/papers/w11001
L1  - http://www.nber.org/papers/w11001.pdf
N1  - Author contact info:
Kira R. Fabrizio
Boston University
Tel: 919-660-7760
E-Mail: kfab@bu.edu

Nancy L. Rose
National Bureau of Economic Research
1050 Massachusetts Avenue
Cambridge, MA  02138
Tel: 617-613-1246
E-Mail: nrose@mit.edu

Catherine Wolfram
Haas School of Business
University of California, Berkeley
Berkeley, CA  94720-1900
Tel: 510/642-2588
Fax: 510/643-1420
E-Mail: wolfram@haas.berkeley.edu
AB  - While neoclassical models assume static cost-minimization by firms, agency models suggest that firms may not minimize costs in less-competitive or regulated environments. We test this using a transition from cost-of-service regulation to market-oriented environments for many U.S. electric generating plants. Our estimates of input demand suggest that publicly-owned plants, whose owners were largely insulated from these reforms, experienced the smallest efficiency gains, while investor-owned plants in states that restructured their wholesale electricity markets improved the most. The results suggest modest medium-term efficiency benefits from replacing regulated monopoly with a market-based industry structure.
ER  -