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Effectiveness of regulation in the electric utility industry

Journal Article · · J. Econ. Bus.; (United States)
OSTI ID:6011473
 [1];
  1. Univ. of Guelph, Ontario, Canada

Ninety privately-owned electric utilities constructed between 1960 and 1967 are examined in terms of the capital/labor ratio, and the conclusion is reached that rate-of-return regulation does not produce the empirical degree of inefficiency that some have suggested. Results indicate that, while strictly regulated firms are most likely to exhibit Averch--Johnson type input distortions, the effect was seen in less than half of the sample. It is not clear whether this is due to the ineffectiveness with which regulation is applied or whether the Averch--Johnson overcapitalization theorem does not hold in the world of regulated utilities. 21 references.

OSTI ID:
6011473
Journal Information:
J. Econ. Bus.; (United States), Journal Name: J. Econ. Bus.; (United States) Vol. 31:3; ISSN JEBUD
Country of Publication:
United States
Language:
English