Working Paper No. 372: Customers’ value-for-money for a regulated service across differen towners
Biggar, D., & Söderberg, M. (2024). Customers’ value-for-money for a regulated service across different owners (Ratio Working Paper No. 372). Ratio.
Biggar, D., & Söderberg, M. (2024). Customers’ value-for-money for a regulated service across different owners (Ratio Working Paper No. 372). Ratio.
What are the best ownership and governance arrangements for a natural monopoly facility? There are three broad approaches: (a) private ownership, coupled with arms-length public utility regulation; (b) some form of government (central, state, or local) ownership; and (c) customer or community ownership. While there is a substantial literature comparing outcomes under private and public (i.e., government) ownership, there is relatively little literature comparing private and/or government ownership with customer ownership. One of the obstacles of performance comparison is that different businesses may choose a different price-quality trade-off, making direct comparison impossible. In this study we cut through this problem by comparing customer perceptions of value-for-money. The study is based on interviews of more than 600 randomly selected electricity distribution customers in Sweden, approximately 150 in each ownership category (municipal, customer, private, and state). These distributors are subject to an identical regulatory framework. The results show that those owned directly by customers are perceived to deliver significantly more value for money than those owned by the government or by private investors. These results lend weight to the view that a well-governed customer-owned utility may lead to better outcomes than other owners.
Biggar, D., & Söderberg, M. (2024). Customers’ value-for-money for a regulated service across different owners (Ratio Working Paper No. 372). Ratio.
2024
Ratio Working Paper Series.
2023
Ratio Working Paper Series
Increasing waste levels, combined with ambitious environmental targets, are exerting upward pressures on the cost for municipal solid waste in many countries. The purpose of this study is to investigate what municipalities can do to counteract this development. We collect information about population, cost and waste from 225 Swedish and Norwegian municipalities and empirically investigate how waste bin structure/type of waste collection system and population affect municipalities’ waste cost. Results indicate that 4-compartment bins is the most expensive bin structure (+13%) and using the same bin types in detached and multi-family dwellings leads to coordination savings (-18%). The cost minimising population is slightly above 600,000 inhabitants. Several of the surveyed municipalities have substantially fewer inhabitants than that and cost per inhabitant can be reduced by up to 30% in several locations through collaborations with larger neighbours. In Sweden, transferring the responsibility for solid waste from the municipalities (290 in total) to the regions (20 in total) would eliminate almost all scale inefficiencies.
2023
SSRN 4333193.
We evaluate the effect of working from home on waste generated by individuals both at and away from their homes. To this end, we collect a unique dataset that matches administrative household-level waste data from Sweden with survey data on how many hours individuals work from home. A novel identification approach allows us to link waste generated away from home to the choice of work location. Our results suggest that working from home reduces organic and residual waste by 20% and 12%, respectively.
2023
Energy Economics, 106614.
Academics and policymakers generally agree that energy infrastructure should be subject to price regulation. More and more critics of modern regulatory approaches, however, point to the apparent failures of these mechanisms to achieve competitive pricing in practice. Some have suggested that customers ought to be involved in the regulatory process, but it is uncertain how customers’ perspectives can best be incorporated. In this study, we evaluate how electoral competition influences monopoly pricing by extending well-known regulatory laboratory experiments. We show that electoral competition has a significant and negative impact on prices. This effect disappears when electoral competition is implemented jointly with incentive regulation, implying substitutability rather than complementarity of regulation and electoral competition.
The article can be accessed in full here.