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X-factor regulation in a developing country: The case of Lima's airport

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  • Defilippi, Enzo

Abstract

In theory, X-factor regulation provides better incentives for cost reduction than previously widely-used rate-of-return regulation. However, a deeper look into how this factor is effectively estimated shows the regulator enjoys a great deal of discretion, especially when selecting the methodologies used to estimate its components. As shown in this paper, discretion increases the likelihood of controversies between the regulator and the regulated firm.

Suggested Citation

  • Defilippi, Enzo, 2015. "X-factor regulation in a developing country: The case of Lima's airport," Transport Policy, Elsevier, vol. 41(C), pages 16-22.
    • Handle: RePEc:eee:trapol:v:41:y:2015:i:c:p:16-22
    DOI: 10.1016/j.tranpol.2015.03.005
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    References listed on IDEAS

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