Restructuring European electricity markets – A panel data analysis

Hyland, Marie

doi:10.1016/j.jup.2015.11.004

Cited by 34 publications

(26 citation statements)

References 30 publications

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“…Sources: Eurostat ERCEG 2010 and ACER Market Monitoring Report2015. 5 Therefore, this methodology may provide new insights when compared with the results of Moreno et al [29], as were the cases of Hyland [24] which studied the impact of the EU restructuring process on electricity prices for industrial consumers or Kais and Sami [28] which provided new empirical evidence on the impact of economic growth and energy use on carbon emissions.…”

Section: Estimation Methodology and Resultsmentioning

confidence: 99%

Assessing the determinants of household electricity prices in the EU: a system-GMM panel data approach

Silva

Cerqueira

2017

Renewable and Sustainable Energy Reviews

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A meaningful portion of the consumer basket of European households and companies is embodied by electricity as well as gas or refined petroleum products. As energy products are essential inputs of nearly all final goods and services, whichever change of energy prices has a direct impact of the general price level. In this context, the main purpose of this study is to assess the main drivers of household electricity prices in the European Union (EU), throughout a period of deep sector transformation. Relying on Eurostat data, not only we analyze the long-term progress of household electricity prices across the EU, but also we provide empirical evidence on their determinants while confronting the results with the EU energy policy path. For this purpose a firsthand approach is herein developed based on a dynamic model with panel data through GMM proposal method by Blundell and Bond (1998) [4] with the Windermeijer (2005) [41] correction. The data analysis provides grounds for a relation between the variable of household electricity prices with variables related to sector liberalization, renewable energy sources which support the EU policy to boost liberalization. This study offers evidence that the sector liberalization is accompanied by a decreasing trend in prices, which is consistent with the European Commission's objectives to liberalize.

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Section: Estimation Methodology and Resultsmentioning

confidence: 99%

Assessing the determinants of household electricity prices in the EU: a system-GMM panel data approach

Silva

Cerqueira

2017

Renewable and Sustainable Energy Reviews

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“…Lastly, the study of unbundling might also be affected by the level of aggregation of the reform indicator. For instance, any aggregation bias might be attenuated considering disaggregated indices (see e.g., Hyland, 2016) in place of an aggregate unbundling indicator that does not distinguish between generation, transmission, distribution, and the retail sale of electricity.…”

Section: Unbundlingmentioning

confidence: 99%

“…In fact, regulatory reforms are often endogenously determined, since factors influencing changes in the outcome variable of interest may also affect the likelihood that policymakers implement them, as well as the timing and sequence in which they are enforced. For example, it may be the case that, at least initially, regulatory reforms lead to higher prices, or that countries with higher electricity prices are more likely to reform their electricity markets (see Hyland, 2016;Nagayama, 2009). The choice of giving up the control of state-owned enterprises to private investors may be determined either by the government need to raise money selling highly profitable public utilities (Cambini and Rondi, 2010) or by the willingness to sell off very inefficient and unprofitable entities.…”

Section: Finding Valid Instrumental Variablesmentioning

confidence: 99%

Evaluating regulatory reform of network industries: a survey of empirical models based on categorical proxies

2018

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Proxies for regulatory reforms based on categorical variables are increasingly used in empirical evaluation models. We surveyed 63 studies that rely on such indices to analyze the effects of entry liberalization, privatization, unbundling, and independent regulation of the electricity, natural gas, and telecommunications sectors. We highlight methodological issues related to the use of these proxies. Next, taking stock of the literature, we provide practical advice for the design of the empirical strategy and discuss the selection of control and instrumental variables to attenuate endogeneity problems undermining identification of the effects of regulatory reforms.

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“…As far as the electricity sector is concerned, Bacchiocchi et al (2015) show that liberalizations are associated with lower electricity prices for the EU15 countries, but with higher prices in New Member States. However, according to Hyland (2016), after controlling for the possible endogeneity of reforms, that arises because prices might be a push factor for reforms, market restructuring does not impact on wholesale electricity prices in EU27. Focusing on developing countries, Nagayama (2007,2009) shows that, contrarily to expectations, liberalizations are associated with industrial and residential electricity prices increases (Nagayama, 2009).…”

Section: Pfr In Network Industries: a Short Reviewmentioning

confidence: 99%

The Empirics of Regulatory Reforms Proxied by Categorical Variables: Recent Findings and Methodological Issues

2017

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Some regulatory reforms do not change just a specific signal that can be represented by a quantitative continuous variable, such as a tax rate, a price cap, or an emission threshold. The standard theory of reform in applied welfare economics (going back to contributions by e.g. Ramsey, Samuelson and Guesnerie) asks the question: What is the marginal effect on social welfare of changing a policy signal?However, reforms such as privatization, unbundling or liberalization of network industries are often described by 'packages' shifting a policy framework. It is increasingly frequent in the empirical evaluation of such reforms to use categorical variables, often in polytomous form, for instance describing unbundling steps (vertical integration, accounting, functional, legal, ownership separation) on a discrete numerical scale, such as those proposed by the OECD and other international bodies. We review recent econometric literature evaluating regulatory reforms using such variables (40 papers) and we discuss some methodological issues arising in this context. standards, administrative guidance and circulars (OECD, 2010). For instance, in the case of the European Union (EU), regulation of network services involves the adoption of both legislative and non-legislative acts, the so-called soft law (Maresca, 2013), 1 with complex implementation mechanisms (Goldberg, 1976). Moreover, the aim of such tools and procedures is often not to induce an immediate change in a signal, but rather to provide mechanisms that, under certain circumstances, should pave the way for such a change.A case in point is the regulation of segments of the telecom industry. For instance, "local loop unbundling" in European member states gives the right to entrants to use the incumbent telecom operator's local broadband network to offer their services directly to customers. 2 Clearly, the implementation of such a legislation cannot be described as a change in the vector of signals (Guthrie, 2006 and Nardotto et al., 2015). Rather, local loop unbundling can be interpreted as a modification of the regulatory policy framework that is expected to create the conditions for a change in signals and is thus not well approximated as a problem belonging to the RSG tradition.We discuss the empirical assessment of "packages" or reforms of policy framework (PFR) and focus on network industries, given the pervasiveness of the economic services they provide (e.g. energy, water, telecommunications, transport). The aim is to provide a consistent analytical scheme to help researchers and policy makers avoiding methodological pitfalls and interpretational errors that might bias the evaluation of reforms when the RSG approach is neither applicable, nor appropriate. We show that, notwithstanding the analysis of PFR cannot rely on well-established theoretical foundations, such as the RSG approach, empirical analyses are feasible and necessary, albeit interpretation of results and therefore design of policy recommendations requires caution.

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Restructuring European electricity markets – A panel data analysis

Cited by 34 publications

References 30 publications

Assessing the determinants of household electricity prices in the EU: a system-GMM panel data approach

Assessing the determinants of household electricity prices in the EU: a system-GMM panel data approach

Evaluating regulatory reform of network industries: a survey of empirical models based on categorical proxies

The Empirics of Regulatory Reforms Proxied by Categorical Variables: Recent Findings and Methodological Issues

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