Colorado-Boulder, and HEC Montreal. All remaining errors are our own.

Economists have long been interested in the implications of private versus public ownership for the provision of services and consumer prices. Empirically, the challenge is to disentangle the effect of ownership from other determinants of prices. In this paper, we use detailed data on retail electricity in the United States to identify the effect of private versus public ownership on prices. Our data include information on thousands of markets, which allow us to control for observed differences in demand and cost conditions. At typical consumption levels, we find that differences between public and private rates were negligible. This suggests the gains from changing ownership type were small in 1935. However, as new technology reduced minimum efficient scale and incentivized private entry into smaller markets, we show that markets switched from public to private ownership. We interpret these findings as evidence for the benefits of maintaining organizational or contractual flexibility and increasing the prospect of passing gains from technological progress on to consumers