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Assessing Brazilian electric power transmission auctions

Author

Listed:
  • Washington Martins Silva
  • Osvaldo Candido

Abstract

Purpose - This paper aims to assess all the Brazilian electric power transmission line auctions occurred between 1999 and 2017. Design/methodology/approach - A copula-based Roy/endogenous switching regression model is used. The suitability of this model is twofold: it takes into account the selection bias problem involving auctions data and it allows more flexibility in modeling the joint distribution between the unobserved components of the selection and outcome equations; thus, normal distribution assumptions are not needed. Findings - The main results suggest that stated-owned companies have the highest probability of winning an auction, and there is a non-competitive behavior among the players in the auction. The results also suggest some departure from joint normality in the data. Originality/value - The copula-based sample selection approach used in this paper is consistent under non-normality and allows one to address different types of nonlinearities in the data such as asymmetry and heavy tails.

Suggested Citation

  • Washington Martins Silva & Osvaldo Candido, 2020. "Assessing Brazilian electric power transmission auctions," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 47(1), pages 182-199, February.
    • Handle: RePEc:eme:jespps:jes-06-2018-0212
    DOI: 10.1108/JES-06-2018-0212
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    Citations

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    Cited by:

    1. Brandão, Lucas G.L. & Ehrl, Philipp, 2022. "The impact of transmission auctions on Brazilian electric power companies," Utilities Policy, Elsevier, vol. 78(C).

    More about this item

    Keywords

    Electric power transmission; Auctions; Copulas methods; Roy/endogenous switching regression model; C15; C46; E52;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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