Working Paper: NBER ID: w22254
Authors: Carl T. Kitchens; Taylor Jaworski
Abstract: In this paper, we quantify the difference between public and private prices of residential electricity immediately before and after major federal reforms in the 1930s and 1940s. Previous research found that public prices were lower in a sample of large, urban markets. Based on new data covering over 15,000 markets and nearly all electricity generated for residential consumption, we find the difference between public and private prices was small in 1935 and negligible in 1940 for typical levels of monthly consumption. These findings are consistent with a market for ownership that helped to discipline electricity prices during this period. That is, private rents were mitigated by the threat that municipalities would use public ownership to respond to constituent complaints and public rents were limited by electoral competition and the growth of private provision.
Keywords: Electricity pricing; Public vs. private ownership; Historical analysis; Federal reforms
JEL Codes: D4; N12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| threat of municipalities switching to public ownership (L32) | limited private monopoly rents (D42) |
| public rents (H82) | constrained by electoral competition (D72) |
| public ownership (L32) | lower electricity prices (L94) |
| public ownership (L32) | higher electricity prices (L97) |