The Economics of Regulation: Principles and Institutions, Volume 1

Front Cover
MIT Press, Jun 22, 1988 - Business & Economics - 616 pages
As Chairman of the Civil Aeronautics Board in the late 1970s, Alfred E. Kahn presided over the deregulation of the airlines and his book, published earlier in that decade, presented the first comprehensive integration of the economic theory and institutional practice of economic regulation. In his lengthy new introduction to this edition Kahn surveys and analyzes the deregulation revolution that has not only swept the airlines but has transformed American public utilities and private industries generally over the past seventeen years. While attitudes toward regulation have changed several times in the intervening years and government regulation has waxed and waned, the question of whether to regulate more or to regulate less is a topic of constant debate, one that The Economics of Regulation addresses incisively. It clearly remains the standard work in the field, a starting point and reference tool for anyone working in regulation.Kahn points out that while dramatic changes have come about in the structurally competitive industries - the airlines, trucking, stock exchange brokerage services, railroads, buses, cable television, oil and natural gas - the consensus about the desirability and necessity for regulated monopoly in public utilities has likewise been dissolving, under the burdens of inflation, fuel crises, and the traumatic experience with nuclear plants. Kahn reviews and assesses the changes in both areas: he is particularly frank in his appraisal of the effect of deregulation on the airlines. His conclusion today mirrors that of his original, seminal work - that different industries need different mixes of institutional arrangements that cannot be decided on the basis of ideology.

From inside the book

Contents

The Distinction in Practice
8
The Limited Attention to Quality of Service
21
Determination of the Rate Base
35
Regulating Rate Structures
54
3
63
Problems of Defining Marginal Cost
70
Tempering Principle with Practicalityor One Principle with Another
83
Peak Responsibility
89
The Orientation of Regulatory Policy 24
24
Community Antenna Television 32
32
A Few Warning Notes 46
46
Incentive Plans
59
Electric Power 70
70
Regulatory Planning 77
77
The Adjudicatory Role and Its Consequences 86
86
The Inherent Limitations of Regulation 93
93

The Appropriate Time Pattern of Rates
103
Reproduction versus Original Capital Costs
109
5
118
Implications and Solutions
130
Principles of Discrimination
137
Fully Distributed Costs
150
6
157
The Impact on Competition at the Secondary Level
166
Impact at the Primary Level and Other Institutional Considerations
175
Practicability Externalities SecondBest
182
Noneconomic Considerations
189
The Problem of Second Best
195
Introduction i
Protectionism and Conservatism
11
The Problems Created by Exempt Carriers 18
18
Internal Motivations 101
101
The Role of Regulation 108
108
Economics of Scale 116
117
Competitive Certification versus Centralized Planning
126
Cases 132
132
Destructive Competition and the Quality of Service 172
172
The Theory Applied 178
178
Stock Exchange Brokerage Commissions 193
193
The Issue of CreamSkimming
220
Integration
251
Intercompany Coordination
307
7
320
The Choice among Imperfect Systems
327
Index Volumes I and II
345
Copyright

Other editions - View all

Common terms and phrases

About the author (1988)

Alfred E. Kahn (1917-2010) was Robert Julius Thorne Professor of Political Economy at Cornell University and Special Consultant to National Economic Research Associates.

Bibliographic information