Title: Evaluating regulatory reform of network industries: a survey of empirical models based on categorical proxies,
Abstract: Proxies for regulatory reforms based on categorical variables are
increasingly used in empirical evaluation models. We surveyed 63 studies that
rely on such indices to analyze the effects of entry liberalization,
privatization, unbundling, and independent regulation of the electricity,
natural gas, and telecommunications sectors. We highlight methodological issues
related to the use of these proxies. Next, taking stock of the literature, we
provide practical advice for the design of the empirical strategy and discuss
the selection of control and instrumental variables to attenuate endogeneity
problems undermining identification of the effects of regulatory reforms.