Transportation Fuels Policy since the OPEC Embargo: Paved with Good Intentions
American Economic Review · 2013 · Volume 103 · Issue 3
Abstract
A long line of research investigates whether the retail prices of electricity and natural gas send proper signals about scarcity in order to induce efficient consumption. Historically, regulated utilities have not designed tariffs that set marginal prices equal to marginal costs. Currently, some jurisdictions are opening the retail sectors to competition via "retail choice." These new regimes replace imperfect regulation with imperfect competition as the process by which retail tariffs are formed. We discuss the challenges in evaluating the efficiency of tariffs and present evidence of how pricing has changed in markets with retail choice.
Keywords
Taxation and Subsidies: Externalities, Redistributive Effects, Environmental Taxes and Subsidies, Mining, Extraction, and Refining: Hydrocarbon Fuels, Industry Studies: Primary Products and Construction: Government Policy, Energy: Demand and Supply, Energy: Government Policy, Transportation: Demand, Supply, and Congestion, Safety and Accidents, Transportation Noise, Transportation Systems: Government Pricing and Policy
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