Leonardo Bornacki de Mattos and João Eustáquio de Lima
Nova Economia, Vol 15, Iss 3, Pp 31-52 (2005)
residential demand, electricity, co-integration, VECM, Economic history and conditions, HC10-1085, Economic theory. Demography, and HB1-3840
The objective of this study was to obtain an estimate for residential electricity demand in Minas Gerais in the period from 1970 to 2002. Specifically, the goal was to estimate price and income elasticities. After determining that the series under study were non-stationary, we chose to use the Co-integration approach, estimating a Vector Error Correction Model (VEC Model). The results obtained show that the demand studied is more sensible to variations in the income than to the price of the electricity, although both elasticities are inferior to the unit. It was also concluded that price-elasticity is higher in Minas Gerais than it is for Brazil as a whole, suggesting differentiated usage of this energy among the different states in the Country.
André Garcez Ghirardi, Milena Couto Rocha, and Luiz Alberto Lima Teixeira
Nova Economia, Vol 12, Iss 1, Pp 41-67 (2002)
Electricity, regulation, rates, quality, investment, Economic history and conditions, HC10-1085, Economic theory. Demography, and HB1-3840
Privatization of electricity distribution in Brasil had, as one of its stated purposes, generation of sufficient revenue to guarantee service quality and full market coverage. Theoretical considerations point towards the possible tendency to underinvestment and to quality deterioration under price-cap rate regulation, which is the system adopted for the segment of captive consumers. This paper offers an analysis of the observed performance of COELBA since its privatization, in order to assess the firms behavior with respect to investment and service quality. The observed results do not contradict the theoretical expectation of underinvestment. There is evidence that investment since privatization was sufficient to improve the firms performance with respect to its own past results; nevertheless, investment was insufficient to raise service quality to the standards of the best utilities in the country.