Empirical Evidence: Regulated Industries

Abstract

At this juncture we have presented neoclassical theory (an admitted mechanical presentation, with some justification), XE theory, and several other deviations from orthodox neoclassical theory. In several ways these deviations, including XE theory, have common elements. In several ways, each is unique. We have also presented the implications of XE theory. It is thus now time to present empirical evidence consistent with these implications of XE theory. Please keep in mind several points about the empirical evidence. First, the evidence is divided into three categories (1) studies on regulated industries, (2) studies on market structure and organizational forms, and (3) studies of input ratios, and international trade. Second, some any of these studies probes into two or more of these categories. Each study is part of the category that seemed to be its central focus, or offers the most complementarity. Third, the use of the term X-efficiency by the authors is reported here. Third, there are literally hundreds of studies whose results are consistent with XE theory. I include here only those studies that are explicit about XE theory.