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Uncovering Regulators' Social Welfare Weights

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  • Thomas W. Ross

Abstract

This article describes a procedure that can be used to infer interesting information about the preferences of regulators from the pricing decisions they make. This is done by using an adaptation of the familiar Ramsey pricing model, which allows benefits derived from the consumption of different goods or derived by different consumers to carry different "social" weights. These weights are then exposed by inverting the first-order conditions of the constrained-maximum problem.

Suggested Citation

  • Thomas W. Ross, 1984. "Uncovering Regulators' Social Welfare Weights," RAND Journal of Economics, The RAND Corporation, vol. 15(1), pages 152-155, Spring.
    • Handle: RePEc:rje:randje:v:15:y:1984:i:spring:p:152-155
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    Cited by:

    1. Douglas C. Turner, 2022. "Access pricing regulation in the U.S. domestic aviation industry," Journal of Regulatory Economics, Springer, vol. 62(1), pages 24-46, December.
    2. Aguiar, Luis & Waldfogel, Joel & Waldfogel, Sarah, 2021. "Playlisting favorites: Measuring platform bias in the music industry," International Journal of Industrial Organization, Elsevier, vol. 78(C).
    3. Ingo Vogelsang & Nishal Ramphal & Stephen Carroll & Nicholas Pace, 2007. "An economic analysis of consumer class actions in regulated industries," Journal of Regulatory Economics, Springer, vol. 32(1), pages 87-104, August.
    4. Valentini, Edilio, 2015. "Indirect taxation, public pricing and price cap regulation: A synthesis," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 9, pages 1-39.
    5. Theodore Keeler, 1984. "Theories of regulation and the deregulation movement," Public Choice, Springer, vol. 44(1), pages 103-145, January.
    6. Olivier Bargain & Mathias Dolls & Dirk Neumann & Andreas Peichl & Sebastian Siegloch, 2014. "Comparing inequality aversion across countries when labor supply responses differ," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(5), pages 845-873, October.
    7. Miravete, Eugenio & Seim, Katja & Thurk, Jeff, 2013. "Complexity, Efficiency, and Fairness of Multi-Product Monopoly Pricing," CEPR Discussion Papers 9641, C.E.P.R. Discussion Papers.
    8. Pérez Montes, Carlos, 2013. "Regulatory bias in the price structure of local telephone service," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 462-476.
    9. Gregory L. Rosston & Scott J. Savage & Bradley S. Wimmer, 2008. "The Effect of Private Interests on Regulated Retail and Wholesale Prices," Journal of Law and Economics, University of Chicago Press, vol. 51(3), pages 479-501, August.
    10. Gregory L. Rosston & Scott J. Savage & Bradley S. Wimmer, 2013. "Effect of Network Unbundling on Retail Prices: Evidence from the Telecommunications Act of 1996," Journal of Law and Economics, University of Chicago Press, vol. 56(2), pages 487-519.
    11. Olivier Bargain & Claire Keane, 2010. "Tax–Benefit‐revealed Redistributive Preferences Over Time: Ireland 1987–2005," LABOUR, CEIS, vol. 24(s1), pages 141-167, December.
    12. Alpizar, Francisco, 2006. "The pricing of protected areas in nature-based tourism: A local perspective," Ecological Economics, Elsevier, vol. 56(2), pages 294-307, February.
    13. Joel Waldfogel, 2015. "First Degree Price Discrimination Goes to School," Journal of Industrial Economics, Wiley Blackwell, vol. 63(4), pages 569-597, December.
    14. Francois, Joseph & Nelson, Douglas R., 2014. "Political support for trade policy in the European Union," European Journal of Political Economy, Elsevier, vol. 36(C), pages 243-253.
    15. Steven Berry & Alon Eizenberg & Joel Waldfogel, 2016. "Fixed Costs and the Product Market Treatment of Preference Minorities," Journal of Industrial Economics, Wiley Blackwell, vol. 64(3), pages 466-493, September.
    16. Klein, Christopher C. & H. Sweeney, George, 1999. "Regulator preferences and utility prices: evidence from natural gas distribution utilities," Energy Economics, Elsevier, vol. 21(1), pages 1-15, February.
    17. Olivier Bargain & Mathias Dolls & Dirk Neumann & Andreas Peichl & Sebastian Siegloch, 2014. "Tax-Benefit Revealed Social Preferences in Europe and the US," Annals of Economics and Statistics, GENES, issue 113-114, pages 257-289.
    18. Carlos Perez Montes, 2012. "Regulatory bias in the price structure of local telephone services," Working Papers 1201, Banco de España.
    19. Valentini, Edilio, 2006. "Uncovering regulator's (implicit) social welfare weights under price cap regulation," Economics Letters, Elsevier, vol. 90(1), pages 1-5, January.
    20. Christopher R. Knittel, 2003. "Market Structure and the Pricing of Electricity and Natural Gas," Journal of Industrial Economics, Wiley Blackwell, vol. 51(2), pages 167-191, June.
    21. Kidokoro, Yukihiro & Zhang, Anming, 2023. "Single-till regulation, dual-till regulation, and regulatory capture: When does a regulatory authority favor single-till regulation over dual-till regulation?," Economics of Transportation, Elsevier, vol. 33(C).
    22. J.A. den Hertog, 2010. "Review of economic theories of regulation," Working Papers 10-18, Utrecht School of Economics.

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