IDEAS home Printed from https://ideas.repec.org/a/rje/bellje/v9y1978ispringp239-248.html
   My bibliography  Save this article

On the Use of Beta in Regulatory Proceedings: An Empirical Examination

Author

Listed:
  • Richard H. Pettway

Abstract

Since the development of the capital asset pricing model and the articles of Myers (1972) and Breen-Lerner (1972), the use of the CAPM to measure the required rate of return of equity investors and thereby to determine the allowed rate of return for a utility has become more common. Although the CAPM does not require structural stability of its parameters measured from historical observations, reasonable stability is presumed. Otherwise the model is not operationally useful. The purposes of this paper are to explore the structural stability of the estimating process and to assess whether the CAPM is operational in actual regulatory proceedings.

Suggested Citation

  • Richard H. Pettway, 1978. "On the Use of Beta in Regulatory Proceedings: An Empirical Examination," Bell Journal of Economics, The RAND Corporation, vol. 9(1), pages 239-248, Spring.
    • Handle: RePEc:rje:bellje:v:9:y:1978:i:spring:p:239-248
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0361-915X%28197821%299%3A1%3C239%3AOTUOIR%3E2.0.CO%3B2-L&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Richard H. Pettway & Bradford D. Jordan, 1987. "Apt Vs. Capm Estimates Of The Return-Generating Function Parameters For Regulated Public Utilities," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 10(3), pages 227-238, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rje:bellje:v:9:y:1978:i:spring:p:239-248. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.rje.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.