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Property Rights versus Public Spirit: Ownership and Efficiency of U.S. Electric Utilities Prior to Rate-of-Return Regulation

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  • Hausman, William J
  • Neufeld, John L

Abstract

For over a century, American economists have been engaged in a vigorous theoretical and empirical debate over the economic performance of publicly-owned versus privately-owned electric utilities. The authors review the historical debate and use micro data collected by the U.S. Commissioner of Labor in 1897-98 to construct efficiency measures based on a nonparametric frontier production function. Since this is prior to state rate-of-return regulation, regulatory effects do not confound the analysis. The authors find that publicly-owned electric utilities were significantly more efficient than their privately-owned counterparts. Copyright 1991 by MIT Press.

Suggested Citation

  • Hausman, William J & Neufeld, John L, 1991. "Property Rights versus Public Spirit: Ownership and Efficiency of U.S. Electric Utilities Prior to Rate-of-Return Regulation," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 414-423, August.
    • Handle: RePEc:tpr:restat:v:73:y:1991:i:3:p:414-23
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    1. Manuel Espitia-Escuer & Lucà a Isabel Garcà a-Cebrià n, 2004. "Measuring the Efficiency of Spanish First-Division Soccer Teams," Journal of Sports Economics, , vol. 5(4), pages 329-346, November.
    2. Montgomery van Wart & Dianne Rahm & Scott Sanders, 2000. "Economic Development and Public Enterprise: The Case of Rural Iowa’s Telecommunications Utilities," Economic Development Quarterly, , vol. 14(2), pages 131-145, May.
    3. Torben Pedersen & Steen Thomsen, 2003. "Ownership Structure and Value of the Largest European Firms: The Importance of Owner Identity," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 7(1), pages 27-55, March.
    4. Bozec, Richard, 2004. "L’analyse comparative de la performance entre les entreprises publiques et les entreprises privées : le problème de mesure et son impact sur les résultats," L'Actualité Economique, Société Canadienne de Science Economique, vol. 80(4), pages 619-654, Décembre.
    5. Landgraf, Steven W., 2020. "Entry threats from municipal broadband Internet and impacts on private provider quality," Information Economics and Policy, Elsevier, vol. 52(C).
    6. Ford, George S., 2007. "Does a municipal electric's supply of communications crowd out private communications investment? An empirical study," Energy Economics, Elsevier, vol. 29(3), pages 467-478, May.
    7. Fremeth, Adam R. & Holburn, Guy L.F., 2020. "The impact of political directors on corporate strategy for government-owned utilities: Evidence from Ontario's electricity distribution sector," Energy Policy, Elsevier, vol. 143(C).
    8. Younes Belfellah & David Carassus, 2016. "L'Accountability dans l'entreprise publique : Revue de littérature et proposition d'un cadre d'analyse," Post-Print hal-01902221, HAL.
    9. Esfahani, Hadi Salehi, 2000. "Institutions and government controls," Journal of Development Economics, Elsevier, vol. 63(2), pages 197-229, December.
    10. Richard Bozec & Mohamed Dia & Gaétan Breton, 2006. "Ownership–efficiency relationship and the measurement selection bias," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 46(5), pages 733-754, December.
    11. Filippo Belloc, 2014. "Innovation in State-Owned Enterprises: Reconsidering the Conventional Wisdom," Journal of Economic Issues, Taylor & Francis Journals, vol. 48(3), pages 821-848.
    12. Lon L. PETERS, 1993. "Non-Profit And For-Profit Electric Utilities In The United States: Pricing And Efficiency," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 64(4), pages 575-604, July.
    13. Brandt, Sylvia J., 2003. "A Tale Of Two Clams: Policy Anticipation And Industry Productivity," Working Paper Series 14523, University of Massachusetts, Amherst, Department of Resource Economics.
    14. Willner, Johan, 2001. "Ownership, efficiency, and political interference," European Journal of Political Economy, Elsevier, vol. 17(4), pages 723-748, November.
    15. Haar, Laura N. & Jones, Trefor, 2008. "Misreading liberalisation and privatisation: The case of the US energy utilities in Europe," Energy Policy, Elsevier, vol. 36(7), pages 2610-2619, July.
    16. Bozec, Richard & Dia, Mohamed, 2007. "Board structure and firm technical efficiency: Evidence from Canadian state-owned enterprises," European Journal of Operational Research, Elsevier, vol. 177(3), pages 1734-1750, March.
    17. Leroux, Anke & Söderberg, Magnus, 2023. "Network Regulation under electoral competition," Energy Economics, Elsevier, vol. 120(C).
    18. Kumbhakar, Subal C. & Hjalmarsson, Lennart, 1998. "Relative performance of public and private ownership under yardstick competition: electricity retail distribution," European Economic Review, Elsevier, vol. 42(1), pages 97-122, January.

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