Competition and Switching in Public Service Markets: Can They Reduce Inequalities?

Regulation & Governance, 11(1): 41-63, 2017

30 Pages Posted: 17 Oct 2015 Last revised: 23 Mar 2018

See all articles by Marcos Fernández-Gutiérrez

Marcos Fernández-Gutiérrez

University of Cantabria

Oliver James

University of Exeter - Department of Politics

Sebastian Jilke

Rutgers University-Newark

Date Written: 2015

Abstract

Regulatory reforms across European countries have attempted to increase consumer welfare by introducing competition and choice into public service markets. But it has been questioned whether reforms have benefited all people equally, suggesting that vulnerable groups of service users are worse-off in the provision of services. We assess the relationship between competition and affordability evaluations of electricity and fixed telephony services across 25 European countries among “vulnerable consumers” and their better-off counterparts. Findings show that the vulnerable experience lower levels of affordability. This inequality-gap is not significantly affected by the competitive market structure of the market. However, where competition is translated into a higher frequency of switching across service providers inequalities are smaller and can disappear. These results suggest that demand-side regulation that is successful in boosting consumer switching can reduce inequalities, highlighting the value of regulatory instruments as means to achieve key aims of the welfare state.

Keywords: public infrastructure services, regulation, regulatory welfare state, liberalization, consumer, equality

JEL Classification: A1, A10, D73, E60, H00, H40, I10, I18, J78, L30, L31, L32, L33, L39, M00, D71

Suggested Citation

Fernández-Gutiérrez, Marcos and James, Oliver and Jilke, Sebastian, Competition and Switching in Public Service Markets: Can They Reduce Inequalities? (2015). Regulation & Governance, 11(1): 41-63, 2017. Available at SSRN: https://ssrn.com/abstract=2675114

Marcos Fernández-Gutiérrez

University of Cantabria ( email )

Avda. Los Castros, s/n
Santander 39005
Spain

Oliver James

University of Exeter - Department of Politics ( email )

Northcote House
The Queen's Drive
Exeter, Devon EX4 4QJ
United Kingdom

HOME PAGE: http://www.huss.ex.ac.uk/politics/staff/james/index.php

Sebastian Jilke (Contact Author)

Rutgers University-Newark ( email )

111 Washington Street
Center for Urban and Public Service
Newark, NJ 07102
United States

HOME PAGE: http://www.sebastianjilke.net

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