The Impact Of Power Market Reforms On Electricity Price-cost Margins And Cross-subsidy Levels: A Cross Country Panel Data Analysis

One of the main expectations from power market reform has been a reduction in price-cost margins and cross-subsidy levels between industrial and residential consumers. This paper focuses on this issue by looking at the impact of the electricity industry reforms on residential and industrial electricity price-cost margins and their effect on cross-subsidy levels between consumer groups. Using panel data for 63 developed and developing countries covering the period 1982 - 2009, empirical models are developed and analyzed. The research findings suggest that there isn't a uniform pattern for the impact of reform process as a whole on price cost margins and cross-subsidy levels. Each individual reform step has different impact on price-cost margins and cross subsidy levels for each consumer and country group.