THE IMPACT OF UTILITY DEREGULATION IN ARIZONA |
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Authors: | BRIAN P. MACFIE |
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Affiliation: | Macfie:;Department of Economics and Finance, Lecturer of Economics and Statistics, Arizona State University, 4701 West Thunderbird Road, Phoenix, AZ 85069. Phone 602-543-6299, Fax 602-543-6221, E-mail: |
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Abstract: | This analysis assesses Arizona's short-run price response to utility energy deregulation in the commercial and industrial sectors and the long-term response to deregulated industrial utility prices. Using a standard utility industry approach, ordinary least squares regression confirms commercial/industrial utility prices remain inelastic and Arizona's deregulation efforts have not effectively promoted short-run price competition. Moreover, widening differences in utility rates could be a response to a stronger long-run price elastic effect across states. The findings suggest states not aggressively deregulating utility price to narrow artificial comparative price advantages could be at a competitive disadvantage for interstate manufacturing investment. ( JEL Q41, Q48, Q40) |
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