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Price Regulation in Australia: How Consistent Has It Been?

Author

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  • ROBERT BREUNIG
  • JEREMY HORNBY
  • SCOTT STACEY
  • FLAVIO MENEZES

Abstract

We assemble a database consisting of 52 regulatory decisions made by seven different regulators across five different industries. We examine how the proportion of firms' revenue requirements that were disallowed by the regulator vary by regulator, industry and time. Despite the differences in the implementation of price regulation across industries and across jurisdictions in Australia, outcomes are surprisingly consistent. For example, we show that it is not possible to reject the hypothesis that the regulatory outcomes in South Australia, New South Wales, the Australian Capital Territory and Victoria are similar despite the different regulatory approaches undertaken in these jurisdictions.

Suggested Citation

  • Robert Breunig & Jeremy Hornby & Scott Stacey & Flavio Menezes, 2006. "Price Regulation in Australia: How Consistent Has It Been?," The Economic Record, The Economic Society of Australia, vol. 82(256), pages 67-76, March.
    • Handle: RePEc:bla:ecorec:v:82:y:2006:i:256:p:67-76
    DOI: 10.1111/j.1475-4932.2006.00294.x
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    References listed on IDEAS

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    1. Robert L. Hagerman & Brian T. Ratchford, 1978. "Some Determinants of Allowed Rates of Return on Equity to Electric Utilities," Bell Journal of Economics, The RAND Corporation, vol. 9(1), pages 46-55, Spring.
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    Cited by:

    1. Flavio Menezes & Magnus Söderberg & Miguel Santolino, 2012. "Regulatory behaviour under threat of court reversal," Discussion Papers Series 472, School of Economics, University of Queensland, Australia.
    2. Söderberg, Magnus & Menezes, Flavio M. & Santolino, Miguel, 2018. "Regulatory behaviour under threat of court reversal: Theory and evidence from the Swedish electricity market," Energy Economics, Elsevier, vol. 71(C), pages 302-310.
    3. Robert Breunig & Flavio M. Menezes, 2012. "Testing Regulatory Consistency," Contemporary Economic Policy, Western Economic Association International, vol. 30(1), pages 60-74, January.
    4. Flavio M. Menezes, 2009. "Consistent Regulation of Infrastructure Businesses: Some Economic Issues," Economic Papers, The Economic Society of Australia, vol. 28(1), pages 2-10, March.
    5. Rod Tyers, 2015. "Service Oligopolies and Australia's Economy-Wide Performance," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 48(4), pages 333-356, December.
    6. Flavio M. Menezes & Christian Roessler, 2010. "Good and Bad Consistency in Regulatory Decisions," The Economic Record, The Economic Society of Australia, vol. 86(275), pages 504-516, December.
    7. Fernando T. Camacho & Flavio M. Menezes, 2008. "Price Regulation and Investment: A Real Options Approach," Discussion Papers Series 373, School of Economics, University of Queensland, Australia.

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