Response to Peter Monkhouse

Nick Wills-Johnson ()
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Nick Wills-Johnson: Centre for Research in Applied Economics; Curtin University of Technology; GPO Box; U1987; Perth; Western Australia; 6845

Economic Analysis and Policy, 2010, vol. 40, issue 1, 112-123

Abstract: The regulation of infrastructure by the ACCC and other economic regulators in Australia is based around net present value estimation techniques. Recently; Monkhouse (2007) suggested that real options valuation would provide better incentives for investment in infrastructure; but did not elucidate how a regulatory system based on real options valuation should operate. This paper endeavours to sketch the outlines of such a system; and finds that it has considerable promise as an alternative to the status quo; provided an appropriate technique for addressing monopoly rents can be developed.

Keywords: Railways; economic regulation (search for similar items in EconPapers)
JEL-codes: K23 L43 L92 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v40:y:2010:i:1:p:112-123

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