Oust the Louse: Does Political Pressure Discipline Regulators?

The Journal of Industrial Economics, Forthcoming

51 Pages Posted: 17 Aug 2011

See all articles by Janice Alane Hauge

Janice Alane Hauge

University of North Texas

Mark A Jamison

University of Florida - Warrington College of Business Administration, Public Utility Research Center

James E. Prieger

Pepperdine University - School of Public Policy

Date Written: June 7, 2011

Abstract

We consider a possible determinant of regulatory decisions by public utility commissioners: the desire to remain in office. We examine regulatory exit, where a regulator leaves a commission during a term or is not re-appointed/re-elected. With data from US states, we empirically investigate several hypotheses motivated by a political agency model of regulatory decision-making. Our empirical results generally support the hypotheses, including that higher electricity prices lead to ousting, that ousting is less common where it is more costly for the principal to whom the regulator reports, and that ousting is more likely where regulators are more accountable or are more likely to share the principal’s preferences. Furthermore, the results provide limited evidence that regulatory exit is not due mainly to the revolving door. Ousting also appears to lower future electricity prices.

Keywords: public utility commission, public service commission, electricity regulation, interval censored duration data, hazard rate, dynamic panel

JEL Classification: L51, D72, D78, L43, L94, L97

Suggested Citation

Hauge, Janice Alane and Jamison, Mark A. and Prieger, James E., Oust the Louse: Does Political Pressure Discipline Regulators? (June 7, 2011). The Journal of Industrial Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1910817

Janice Alane Hauge

University of North Texas ( email )

1155 Union Circle #305340
Denton, TX 76203
United States
940-565-4544 (Phone)

Mark A. Jamison

University of Florida - Warrington College of Business Administration, Public Utility Research Center ( email )

PO Box 117142
Gainesville, FL 32611
United States
352-392-6148 (Phone)
352-392-7796 (Fax)

HOME PAGE: http://warrington.ufl.edu/purc/facultyinfo.asp?WEBID=1217

James E. Prieger (Contact Author)

Pepperdine University - School of Public Policy ( email )

24255 Pacific Coast Highway
Malibu, CA 90263
United States
3105067150 (Phone)
3105067494 (Fax)

HOME PAGE: http://sites.google.com/a/pepperdine.edu/jprieger/

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