Assessing Brazilian electric power transmission auctions: A copula-based sample selection model
ISSN: 0144-3585
Article publication date: 28 February 2020
Issue publication date: 12 March 2020
Abstract
Purpose
This paper aims to assess all the Brazilian electric power transmission line auctions occurred between 1999 and 2017.
Design/methodology/approach
A copula-based Roy/endogenous switching regression model is used. The suitability of this model is twofold: it takes into account the selection bias problem involving auctions data and it allows more flexibility in modeling the joint distribution between the unobserved components of the selection and outcome equations; thus, normal distribution assumptions are not needed.
Findings
The main results suggest that stated-owned companies have the highest probability of winning an auction, and there is a non-competitive behavior among the players in the auction. The results also suggest some departure from joint normality in the data.
Originality/value
The copula-based sample selection approach used in this paper is consistent under non-normality and allows one to address different types of nonlinearities in the data such as asymmetry and heavy tails.
Keywords
Acknowledgements
The authors gratefully acknowledge the financial support from the CNPq Foundation (453993/2014–1 and 307491/2016–1) and FAPDF foundation (Edital 05/2018) from Brazil. Any error is the authors' sole responsibility.
Citation
Silva, W.M. and Candido, O. (2020), "Assessing Brazilian electric power transmission auctions: A copula-based sample selection model", Journal of Economic Studies, Vol. 47 No. 1, pp. 182-199. https://doi.org/10.1108/JES-06-2018-0212
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited