Table A-5 Effects of Changes in Explanatory Variables on UNE Rates in the Long-Run
One-Year Lag Specifiation Two-Year Lag Specifiation
Effect of a 1- Economic Effect of a 1- Economic
Variable Unit Increase Effect1 Unit Increase Effect'
Effect of Neighbors' Rates
0.63 2.16 1.00 ** 3.36 **
Leader's Rate on Followers (C)
(1.67) (1.67) (2.47) (2.47)
-0.067 -0.31 -0.345 -1.08
Followers' Rates on Followers (C) -
(-0.21) (-0.21) (-0.98) (-0.98)
0.467 *** 1.21 *** 0.534 *** 1.67 ***
Followers' Rates on Leaders (C)
(3.38) (3.38) (4.79) (4.79)
Effect of Other Explanatory Variables
0.489 *** 2.14 *** 0.521 *** 2.20 ***
ost () (3.93) (3.93) (5.17) (5.17)
Percent of Commissioners -0.002 -0.07 -0.011 -0.38
Republican (C) (-0.13) (-0.13) (-1.20) (-1.20)
Average Tenure of Commissioners 0.136 0.42 0.087 0.26
(C) (1.11) (1.11) (0.96) (0.96)
Rate of Return Retail Rate 1.510 1.51 0.834 0.83
Regulation (B) (0.29) (0.29) (0.20) (0.20)
1.71 0.84 1.42 1.42 *
Governor Republican (B) 1. 1. 1.
(1.53) (1.53) (1.75) (1.75)
Percent of State Legislature -1.97 -0.28 -2.03 -0.28
Republican (C) (-0.57) (-0.57) (-0.77) (-0.77)
Percent of PUC Republican -0.019 -0.77 -0.011 -0.45
Interacted with Governor (-0.78) (-0.78) (-0.77) (-0.77)
0.672 0.67 0.401 0.40
AT&T Arbitration (B)
(0.30) (0.30) (0.30) (0.30)
Period Prior to Decision on Long- -3.890** -3.89** -2.590 -2.59 *
Distance Application (B) (-2.24) (-2.24) (-1.90) (-1.90)
Voluntary Reduction by -4.29 -4.29 -3.44 -3.44 *
Incumbent (B) (-1.78) (-1.78) (-1.96) (-1.96)
UNE Entry (lagged 1 year, divided 6.22 ** 6.22 ** 5.40 ** 5.40 **
by state standard deviation) (C) 2 (2.18) (2.18) (2.60) (2.60)
Average Retail Rate (lagged 1 0.063 0.33 0.058 0.30
year) (C) (0.77) (0.77) (0.80) (0.80)
Economic effects for continuous explanatory variables are based on a one standard deviation increase in
that variable, while economic effects for binary explanatory variables are based on a change in the
variable from zero to one.
2 This variable is already scaled by dividing by the standard deviation, so the economic effect is based on
a one-unit increase.
Notes (B) binary explanatory variable, (C) continuous explanatory variable, t-statistics are reported in
reported in parentheses
*** statistically significant at 99% confidence level, ** statistically significant at 95% confidence
level, statistically significant at 90% confidence level