Static vs. Dynamic Impacts of Unbundling – Electricity Markets in South America

30 Pages Posted: 15 Jun 2013

See all articles by Dominik Schober

Dominik Schober

ZEW – Leibniz Centre for European Economic Research

Date Written: 2013

Abstract

Ownership unbundling and third party access are discussed as two options of unbundling in both the literature and political discussions. Focusing on the South American electricity sector, I contrast static and dynamic impacts of ownership unbundling and third party access regimes on customer prices. Substantially different results are found using dynamic rather than static analysis. In particular, negative short term effects of ownership unbundling found in static models are approximately cancelled out by subsequent positive impacts in the dynamic model. Third party access seems to allow for similar benefits while avoiding the (restructuring) costs of ownership unbundling. Previously estimated static models thus appear to suffer from either omitted variable biases or endogeneity problems of static non-difference models.

Keywords: (de)regulation, dynamic panel data analysis, electricity markets, market organization, unbundling, non-discriminatory (third party) access

JEL Classification: L42, L51, L52, L94

Suggested Citation

Schober, Dominik, Static vs. Dynamic Impacts of Unbundling – Electricity Markets in South America (2013). ZEW - Centre for European Economic Research Discussion Paper No. 33. Available at SSRN: https://ssrn.com/abstract=2278861 or http://dx.doi.org/10.2139/ssrn.2278861

Dominik Schober (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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