The brave new world of public infrastructure: is market-oriented reform producing a

Abstract

The European Commission has formally recognised that adequate provision of basic household services, including energy, communications, water and transport, is key to ensuring equity, social cohesion and solidarity. And yet little research has been done on the impact of the reform of these services in this regard. This paper offers an innovative way to explore such questions by analysing and contrasting stated and revealed preferences on citizen satisfaction with and expenditure on two services, electricity and telecommunications, in two large European countries, Spain and the United Kingdom. In telecommunications, but much less so in electricity, we find evidence that reform has led to a “two-track” Europe, where citizens who are elderly, not working or the less-educated behave differently in the market, with the result that they are less satisfied with these services than their younger, working, higher-income counterparts.