What is the X-Factor in the German Electricity Industry?
A new legislation in the German electricity market requires the implementation of an incentive-based regulation within the next years. In such a regime either prices or revenuesare capped and grow with the inflation rate minus a factor, which accounts for productivitydifferences between the sector and the rest of the economy. This paper derivessuch an X-factor for the German electricity industry using a new productivity databaseand Growth Accounting methodology. Considering that several underlying assumptionsare violated due to market imperfections, the calculated X-factor rises from 0.48 to amodified value of 2.15.
|Date of creation:||2006|
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- Jeffrey I. Bernstein & David E. M. Sappington, 1998.
"Setting the X Factor in Price Cap Regulation Plans,"
NBER Working Papers
6622, National Bureau of Economic Research, Inc.
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- Ingo Vogelsang, 2005. "The German Electricity Sector – Finally on the Move?," CESifo DICE Report, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(2), pages 30-39, 07.
- Bernstein, Jeffrey I. & Sappington, David E. M., 2000. "How to determine the X in RPI-X regulation: a user's guide," Telecommunications Policy, Elsevier, vol. 24(1), pages 63-68, February.
- Mark Armstrong & Simon Cowan & John Vickers, 1994. "Regulatory Reform: Economic Analysis and British Experience," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510790, June.
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