Is Market-Oriented Reform Producing a 'Two-Track' Europe? Evidence from Electricity and Telecommunications

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. 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, telecommunications and electricity, in two large countries, Spain and the United Kingdom. We find evidence that in telecommunications, but not in electricity, 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, better-educated, counterparts