The authors acknowledge financial support from the American Public Power Association, Fundación Repsol-YPF and the Spanish Ministry of Innovation and Science (project ECO2010-21242-C03-03).
Vertical and Horizontal Scope Economies in the Regulated U.S. Electric Power Industry†
Article first published online: 17 OCT 2012
© 2012 Blackwell Publishing Ltd and the Editorial Board of The Journal of Industrial Economics
The Journal of Industrial Economics
Volume 60, Issue 3, pages 434–467, September 2012
How to Cite
Arocena, P., Saal, D. S. and Coelli, T. (2012), Vertical and Horizontal Scope Economies in the Regulated U.S. Electric Power Industry. The Journal of Industrial Economics, 60: 434–467. doi: 10.1111/j.1467-6451.2012.00486.x
- Issue published online: 17 OCT 2012
- Article first published online: 17 OCT 2012
- American Public Power Association, Fundación Repsol-YPF
- Spanish Ministry of Innovation and Science. Grant Number: ECO2010-21242-C03-03
This paper investigates vertical economies between generation and distribution of electric power, and horizontal economies between different types of power generation in the U.S. electric utility industry. Our quadratic cost function model includes three generation output measures (hydro, nuclear and fossil fuels), which allows us to analyze the effect that generation mix has on vertical economies. Our results provide (sample mean) estimates of vertical economies of 8.1% and horizontal economies of 5.4%. An extensive sensitivity analysis is used to show how the scope measures vary across alternative model specifications and firm types.