Privatization in the natural gas sector
A general equilibrium analysis
DOI:
https://doi.org/10.47872/laer.v32.199Abstract
A broad literature highlights efficiency gains due to cost reduction after privatizations in the energy sector. However, to the best of our knowledge, this literature does not develop general equilibrium models, which are fundamental to account for post-privatization gains from a regional perspective. This paper evaluates the increase in efficiency necessary to make the privatization of a natural gas local distribution company (LDC) worthwhile in a state-level fiscal sense. We propose a general equilibrium model representing a regional economy supplied by a monopolistic LDC, whose ownership is shared between the private sector and federal and state governments and calibrate it for 13 of the major Brazilian LDCs. We find that the necessary unit cost reduction varies substantially across LDCs and depends on the level of underpricing when the asset is sold. The necessary unitary cost reductions range from 1.6% to 64% when we consider the median level of underpricing found in the literature.
Downloads
Published
Issue
Section
License
Copyright (c) 2023 Rafael Serrano-Quintero; Bruno R. Delalibera; Guilherme G. Zimmermann
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
LAER Copyright and License
Authors submitting articles to Latin American Economic Review (LAER), automatically grant this journal a license to publish. Copyright of all published material remains with the authors, who can reuse it in future work without needing to make reference to LAER. Similarly, any other contribution of material to the website (for example text, photographs, graphics, video or audio) automatically grants us a right to publish. Copyright, however, remains with the author(s).
Authors release their work under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND 4.0). This license allows anyone to copy, distribute and transmit the work, provided the use has no derivatives, is non-commercial and appropriate credit to the author(s) is given. (If you remix, transform, or build upon the material, you may not distribute the modified material.)
A human-readable summary of the licence:
https://creativecommons.org/licenses/by-nc-nd/4.0/
Full legal text: