← Search

American Economic Review Vol. 111 No. 4 2021

When Does Regulation Distort Costs? Lessons from Fuel Procurement in US Electricity Generation: Comment

Jin Han1; Jean-François Houde2; Arthur A. van Benthem3; Jose Miguel Abito4

1 Republic of Korea Air Force Academy (email: ) · 2 Department of Economics, University of Wisconsin-Madison, and NBER (email: ) · 3 The Wharton School, University of Pennsylvania, and NBER (email: ) · 4 The Wharton School, University of Pennsylvania (email: )

Abstract

We revisit one of the results in Cicala (2015) and show that the previously estimated large and significant effects of US electricity restructuring on fuel procurement are not robust to the presence of outliers. Using methodologies from the robust statistics literature, we estimate the effect to be less than one-half of the previous estimate and not statistically different from zero. The robust methodology also identifies as outliers the plants owned by a single company whose coal contracts were renegotiated before discussions about restructuring even started.

DOI
10.1257/aer.20200679
Volume
111
Issue
4
Pages
1356-1372
Language
en
Sources
bibtex:phds-export.bib openalex crossref

Cite