Productivity of the Regional Bell Operating Companies Under Rate-of-Return and Price-Cap Regulation

Simple item page
dc.contributor.authorKelly, Tracey Elizabethen
dc.contributor.committeechairWentzler, Nancy A.en
dc.contributor.committeememberPorter, W. Russellen
dc.contributor.committeememberReid, Brian K.en
dc.contributor.departmentEconomicsen
dc.date.accessioned2014-03-14T20:51:30Zen
dc.date.adate1997-04-25en
dc.date.available2014-03-14T20:51:30Zen
dc.date.issued1997-04-25en
dc.date.rdate1997-04-25en
dc.date.sdate1998-07-17en
dc.description.abstractIn 1991, the Federal Communications Commission began regulating the tariffed rates of the nation's largest local exchange carriers under a new regulatory scheme: price-cap regulation. Price caps were intended to "remedy" the ills of traditional rate-of-return regulation. They were to provide incentive for the telephone companies to adopt innovative technology, cost-cutting measures and provide telephone services more efficiently. To test the effectiveness of this incentive, this study examined productivity of the regional Bell operating companies (RBOCs) under both rate-of-return regulation and price-cap regulation. A total factor productivity model was developed and productivity gains were calculated under both regulatory regimes. The assumption of total factor productivity was then relaxed and value-added productivity and labor productivity measures were also examined. The point estimates of productivity gains indicate that price caps have led to greater productivity gains. Although productivity gains varied greatly across individual RBOCs, use of total RBOC data indicated that average productivity gains improved 1.3 percent under price caps using the TFP model. Similar improvements under price caps were estimated using the value-added (1.1 percent) and labor productivity measurements (1.3 percent). However, because of the variability of the annual estimates, none of the productivity improvements are statistically significant. In conclusion, calculations of RBOC productivity gains suggest that price caps have led to more efficient use of inputs--labor; materials, rents and services; and capital--in the production of telephone company output. Yet, the statistical evidence is not strong enough to unequivocally support the assertion that price cap regulation has led to great productivity gains.en
dc.description.degreeMaster of Artsen
dc.identifier.otheretd-424016649721251en
dc.identifier.sourceurlhttp://scholar.lib.vt.edu/theses/available/etd-424016649721251/en
dc.identifier.urihttp://hdl.handle.net/10919/36698en
dc.publisherVirginia Techen
dc.relation.hasparttek_mt.PDFen
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subjectproductivityen
dc.subjectprice cap regulationen
dc.subjecttelecommunicationsen
dc.subjectrate of return regulationen
dc.titleProductivity of the Regional Bell Operating Companies Under Rate-of-Return and Price-Cap Regulationen
dc.typeThesisen
thesis.degree.disciplineEconomicsen
thesis.degree.grantorVirginia Polytechnic Institute and State Universityen
thesis.degree.levelmastersen
thesis.degree.nameMaster of Artsen

Files

Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
tek_mt.PDF
Size:
182.74 KB
Format:
Adobe Portable Document Format
Download

Collections

Masters Theses