Multi-Period Dea Incentive Regulation in Electricity Distribution

Per Agrell (), Peter Bogetoft and Jørgen Tind

No 2000-13, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics

Abstract: Multi-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.

Keywords: Regulation; Efficiency analysis; Incentive systems (search for similar items in EconPapers)
JEL-codes: D82 L51 L94 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2000-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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