UBC Theses and Dissertations
Measuring the impact of regulation in a dynamic context : an application to Bell Canada Patry, Michel
In this thesis, a model of producer behavior for a regulated utility that fully takes into account the dynamic nature of the capital accumulation process of the firm is developed and empirically implemented using recent data on Bell Canada. On the basis of this model of producer behavior, loss formulae that approximate the value of foregone output due to imperfect regulation in a dynamic context are derived and estimates of the deadweight loss in the case of Bell are provided. The estimation results indicate the importance of dynamic elements, such as expectations and adjustment costs of investment, in modeling the behavior of Bell. They also suggest that rate of return regulation may have affected the investment decisions of the utility.