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How to determine the X in RPI-X regulation: a user's guide


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  • Bernstein, Jeffrey I.
  • Sappington, David E. M.


We examine the appropriate choice of an X factor in RPI-X (or price cap) regulation. After providing a basic guideline, we explain how to modify this guideline to account for: (1) limited spans of regulatory control; (2) anticipated structural changes in the regulated industry, such as a strengthening of competitive forces; (3) major impacts of the pricing decisions of the regulated firm on the economy-wide rate of price inflation; and (4) imperfect competition outside of the regulated sector.

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Bibliographic Info

Article provided by Elsevier in its journal Telecommunications Policy.

Volume (Year): 24 (2000)
Issue (Month): 1 (February)
Pages: 63-68

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Handle: RePEc:eee:telpol:v:24:y:2000:i:1:p:63-68

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Keywords: X factor Price cap regulation Regulation policy;


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Cited by:
  1. Resende, Marcelo, 2002. "Relative efficiency measurement and prospects for yardstick competition in Brazilian electricity distribution," Energy Policy, Elsevier, vol. 30(8), pages 637-647, June.
  2. David Hawdon & Lester C. Hunt & Paul Levine & Neil Rickman, 2005. "Optimal sliding scale regulation: An application to regional electricity distribution in England and Wales," Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) 111, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.
  3. Andreas Kuhlmann, 2006. "What is the X-Factor in the German Electricity Industry?," Ifo Working Paper Series Ifo Working Papers No. 34, Ifo Institute for Economic Research at the University of Munich.
  4. Zimmerman, Paul R. & Flaherty, Susan M.V., 2007. "Location monopolies and prison phone rates," The Quarterly Review of Economics and Finance, Elsevier, vol. 47(2), pages 261-278, May.
  5. Evangelinos, Christos, 2013. "Infrastrukturpreise: Eine normativ-theoretische Analyse," Discussion Papers 1/2013, Dresden University of Technology, Faculty of Transportation and Traffic Sciences "Friedrich List", Institute for Transport and Economics.
  6. J. Alejandro Tirado, 2005. "The Mexican fixed national long distance market: evidence of monopoly power," EconoQuantum, Revista de Economia y Negocios, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 1(2), pages 103-123, Enero-Jun.


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