Production, efficiency, and welfare in the natural gas transmission industry

Journal Article · Thu Jun 01 00:00:00 EDT 1978 · Am. Econ. Rev.; (United States)

OSTI ID:6689587

Callen, J L

The author investigates the Averch-Johnson-Wellisz hypothesis as it applies to the interstate natural gas transmission industry and analyzes the impact on the industry of rate-of-return regulation. Four optimization models simulate the industry's input-output decisions. The constrained revenue-maximizing model is shown to make the best predictions in comparison with the constrained profit-maximizing (CPM) and profit-maximizing (PM) models. Regulation is shown to have modified industry behavior. The author then analyzes the social-welfare benefits from marginal-cost pricing and finds them to be acceptable. 27 references.

• Research Organization: McMaster Univ., Hamilton, Ont.
• OSTI ID: 6689587
• Journal Information: Am. Econ. Rev.; (United States), Journal Name: Am. Econ. Rev.; (United States) Vol. 68:3; ISSN AERNA
• Country of Publication: United States
• Language: English

Related Subjects

03 NATURAL GAS
030600 -- Natural Gas-- Economic
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
293000 -- Energy Planning & Policy-- Policy
Legislation
& Regulation
294003* -- Energy Planning & Policy-- Natural Gas
ACCOUNTING
CHARGES
ECONOMIC ANALYSIS
ECONOMIC POLICY
ECONOMICS
EFFICIENCY
FORECASTING
INDUSTRY
INPUT-OUTPUT ANALYSIS
MANAGEMENT
MARGINAL-COST PRICING
NATURAL GAS INDUSTRY
OPTIMIZATION
PRODUCTION
REGULATIONS
SOCIAL IMPACT