Uri, Noel D. (Common Carrier Bureau, Federal Communications Commission, Washington, DC)
Abstract
Calculation of the productivity offset or the X-factor used in setting price caps has a fundamental flaw when it is based on conventional growth accounting total factor productivity analysis. The problem is discussed in the context of incentive regulation used by the Federal Communications Commission in the United States and the appropriate correction is indicated. An example of the problem and its correction, using the access charge for interstate service in telecommunications, is provided. The correction shows that the appropriate X-factor is 9% greater than that based on conventional growth accounting total factor productivity analysis.
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Article provided by Queensland University of Technology (QUT), School of Economics and Finance in its journal Economic Analysis and Policy (EAP).
Volume (Year): 31 (2001) Issue (Month): 2 (September) Pages: 187-203 Download reference. The following formats are available: HTML,
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Find related papers by JEL classification: D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
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