Article ID: | iaor20053159 |
Country: | Netherlands |
Volume: | 23 |
Issue: | 2 |
Start Page Number: | 173 |
End Page Number: | 201 |
Publication Date: | May 2005 |
Journal: | Journal of Productivity Analysis |
Authors: | Tind Jrgen, Bogetoft Peter, Agrell Per J. |
Keywords: | statistics: data envelopment analysis |
Multi-period multi-product regulatory schemes for electricity distributors are presented, based on cost information from a productivity analysis model and an agency theoretical decision model. The proposed schemes are operational and demonstrate considerable advantages compared to the popular CPI-X revenue cap regulation. The schemes avoid arbitrariness, excessively high or negative informational rents as well as ratchet effects and they promote rapid productivity catch-up by making full use of available data. More generally, the paper contributes to the theoretical unification between firm based Data Envelopment Analysis productivity models and micro-economic reimbursement theories.