Multi-Period Dea Incentive Regulation in Electricity Distribution
AbstractMulti-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, too 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 (DEA) productivity models and micro-economic reimbursement theories.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number 2000-13.
Length: 16 pages
Date of creation: Dec 2000
Date of revision:
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Regulation; Efficiency analysis; Incentive systems;
Find related papers by JEL classification:
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
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- Freixas, Xavier & Guesnerie, Roger & Tirole, Jean, 1985. "Planning under Incomplete Information and the Ratchet Effect," Review of Economic Studies, Wiley Blackwell, vol. 52(2), pages 173-91, April.
- Jamasb, T. & Mota, R. & Newbery, D. & Pollitt, M., 2004.
"‘Electricity Sector Reform in Developing Countries: A Survey of Empirical Evidence on Determinants and Performance’,"
Cambridge Working Papers in Economics
0439, Faculty of Economics, University of Cambridge.
- Jamasb, Tooraj & Mota, Raffaella & Newbery, David & Pollitt, Michael, 2005. "Electricity sector reform in developing countries : a survey of empirical evidence on determinants and performance," Policy Research Working Paper Series 3549, The World Bank.
- Munksgaard, Jesper & Pade, Lise-Lotte & Fristrup, Peter, 2005. "Efficiency gains in Danish district heating. Is there anything to learn from benchmarking?," Energy Policy, Elsevier, vol. 33(15), pages 1986-1997, October.
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