Skip to main content
placeholder image

Revisiting electricity liberalization and quality of service: empirical evidence from New Zealand

Journal Article


Abstract


  • ABSTRACT: What effect does the firm structure have on the quality of service delivered by networks and infrastructure industries? We answer this question by empirically assessing the impacts of complete vertical separation, such as ownership unbundling, on the quality of service delivered by a liberalized network industry. Electricity distribution utilities in New Zealand are considered for this purpose and are analysed using panel-data econometrics. The results show robust evidence that ownership unbundling contributed to a fall in the duration and frequency of supply interruptions in electricity distribution. However, the results also show that unbundling has no effect on reducing distribution network losses. These results, overall, highlight the nonsimple impacts of ownership unbundling on the quality of electricity distribution. We suggest that the quality of service may largely improve when considered in the economic regulation of electricity networks than completely relying on specific reform measures such as ownership unbundling.

Publication Date


  • 2016

Citation


  • Nepal, R., Carvalho, A., & Foster, J. (2016). Revisiting electricity liberalization and quality of service: empirical evidence from New Zealand. Applied Economics, 48(25), 2309-2320. doi:10.1080/00036846.2015.1119789

Scopus Eid


  • 2-s2.0-84961207125

Start Page


  • 2309

End Page


  • 2320

Volume


  • 48

Issue


  • 25

Abstract


  • ABSTRACT: What effect does the firm structure have on the quality of service delivered by networks and infrastructure industries? We answer this question by empirically assessing the impacts of complete vertical separation, such as ownership unbundling, on the quality of service delivered by a liberalized network industry. Electricity distribution utilities in New Zealand are considered for this purpose and are analysed using panel-data econometrics. The results show robust evidence that ownership unbundling contributed to a fall in the duration and frequency of supply interruptions in electricity distribution. However, the results also show that unbundling has no effect on reducing distribution network losses. These results, overall, highlight the nonsimple impacts of ownership unbundling on the quality of electricity distribution. We suggest that the quality of service may largely improve when considered in the economic regulation of electricity networks than completely relying on specific reform measures such as ownership unbundling.

Publication Date


  • 2016

Citation


  • Nepal, R., Carvalho, A., & Foster, J. (2016). Revisiting electricity liberalization and quality of service: empirical evidence from New Zealand. Applied Economics, 48(25), 2309-2320. doi:10.1080/00036846.2015.1119789

Scopus Eid


  • 2-s2.0-84961207125

Start Page


  • 2309

End Page


  • 2320

Volume


  • 48

Issue


  • 25