Regulation, Capital Vintage, and Technical Change in the Electric Utility Industry
The Review of Economics and Statistics
1984
This paper presents estimates of the rate of technical change in the electric power industry over the period 1951-78. The estimated model directly incorporates the effects of rate-of-return regulation, and uses both a time trend and a vintage index to represent disembodied and embodied technical change, respectively. The results indicate that disembodied technical change was the primary source of cost reduction during 1951-70, and that tighter regulation, as represented by a one point reduction in the rate of return, would have reduced the rate of technical change by an average of 1%-2% during 1951-78. 34 references, 18 footnotes, 3 tables.
- DOI
- 10.2307/1924696
- Volume
- 66 (1)
- Pages
- 59
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