Information Disclosure Policies: Evidence from the Electricity Industry

16 Pages Posted: 29 Mar 2010

See all articles by Magali A. Delmas

Magali A. Delmas

University of California, Los Angeles (UCLA)

Maria J. Montes-Sancho

University of California, Santa Barbara

Jay Shimshack

University of Virginia - Frank Batten School of Leadership and Public Policy

Abstract

While theory suggests that information programs may correct market failures and improve welfare, the empirical impacts of these policies remain undetermined. We show that mandatory disclosure programs in the electricity industry achieve stated policy goals. We find that the proportion of fossil fuels decreases, and the proportion of clean fuels increases in response to disclosure programs. However, the programs may produce unintended consequences. For example, programs may make “clean” firms cleaner, while leaving “dirty” firms relatively unchanged. If the marginal benefits of pollution abatement are larger at dirty firms than at clean firms, disclosure programs may induce inefficient abatement allocations.

JEL Classification: D83, Q58, D21

Suggested Citation

Delmas, Magali A. and Montes-Sancho, Maria J. and Shimshack, Jay, Information Disclosure Policies: Evidence from the Electricity Industry. Economic Inquiry, Vol. 48, No. 2, pp. 483-498, April 2010. Available at SSRN: https://ssrn.com/abstract=1578522 or http://dx.doi.org/10.1111/j.1465-7295.2009.00227.x

Magali A. Delmas (Contact Author)

University of California, Los Angeles (UCLA) ( email )

405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095
United States

Maria J. Montes-Sancho

University of California, Santa Barbara ( email )

Bren School Environmental Science & Management
3518 Bren Hall
Santa Barbara, CA 93106-5131
United States
805-893-8485 (Phone)

HOME PAGE: http://www.bren.ucsb.edu/people/usernew.asp?user=montes

Jay Shimshack

University of Virginia - Frank Batten School of Leadership and Public Policy ( email )

235 McCormick Rd.
P.O. Box 400893
Charlottesville, VA 22904-4893
United States

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