INFORMATION DISCLOSURE POLICIES: EVIDENCE FROM THE ELECTRICITY INDUSTRY

  1. MAGALI DELMAS1,
  2. MARIA J. MONTES-SANCHO2,
  3. JAY P. SHIMSHACK3,†

Article first published online: 2 JUN 2009

DOI: 10.1111/j.1465-7295.2009.00227.x

Issue

Economic Inquiry

Economic Inquiry

Volume 48, Issue 2, pages 483–498, April 2010

Additional Information

How to Cite

DELMAS, M., MONTES-SANCHO, M. J. and SHIMSHACK, J. P. (2010), INFORMATION DISCLOSURE POLICIES: EVIDENCE FROM THE ELECTRICITY INDUSTRY. Economic Inquiry, 48: 483–498. doi: 10.1111/j.1465-7295.2009.00227.x

Author Information

  1. 1

    Delmas: Associate Professor, Institute of the Environment, University of California, Los Angeles CA 90095. Phone 1-310-825-9310, Fax 1-310-825-9663, E-mail delmas@ioe.ucla.edu

  2. 2

    Montes-Sancho: Assistant Professor, Department of Business Administration, Carlos III University, C/Madrid 126, Getafe, 28903 Madrid, Spain. Phone 34-91-624-8639, Fax 34-91-624-9607, E-mail mmontes@emp.uc3m.es

  3. 3

    Shimshack: Assistant Professor, Department of Economics, Tulane University, New Orleans, LA 70118. Phone 1-504-862-8353, Fax 1-504-865-5869, E-mail jshimsha@tulane.edu

  1. †

    We thank the journal editor, two anonymous referees, and seminar participants at the Association of Environmental and Resource Economists (AERE) sessions at the AEA meetings, the University of Maryland, Harvard University, Harvard’s Center for Business and Government, Yale University, the Santa Barbara Workshop on Environmental Economics, the World Congress of Environmental and Resource Economists, the AERE sessions at the Agricultural and Applied Economics Association (AAEA) meetings, and the International Society for New Institutional Economics (ISNIE) conference. Special thanks are also due to Timothy Beatty, Trudy Cameron, Meredith Fowlie, Gary Libecap, Madhu Khanna, John Lynham, Erin Mansur, Gib Metcalf, and Kerry Smith. J.P.S. thanks the Donald Bren School of Environmental Science and Management for space and support.

  • †

    We thank the journal editor, two anonymous referees, and seminar participants at the Association of Environmental and Resource Economists (AERE) sessions at the AEA meetings, the University of Maryland, Harvard University, Harvard’s Center for Business and Government, Yale University, the Santa Barbara Workshop on Environmental Economics, the World Congress of Environmental and Resource Economists, the AERE sessions at the Agricultural and Applied Economics Association (AAEA) meetings, and the International Society for New Institutional Economics (ISNIE) conference. Special thanks are also due to Timothy Beatty, Trudy Cameron, Meredith Fowlie, Gary Libecap, Madhu Khanna, John Lynham, Erin Mansur, Gib Metcalf, and Kerry Smith. J.P.S. thanks the Donald Bren School of Environmental Science and Management for space and support.

Publication History

  1. Issue published online: 24 MAR 2010
  2. Article first published online: 2 JUN 2009
  3. Online Early publication June 2, 2009

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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 D83, Q58, D21)

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