Data Envelopment Analysis Journal > Vol 3 > Issue 1–2

Regulatory Benchmarking: Models, Analyses and Applications

Per J. Agrell, Louvain School of Management and CORE, Universite Catholique de Louvain, Belgium, per.agrell@uclouvain.be Peter Bogetoft, Copenhagen Business School, Denmark and Yale School of Management, USA, pb.eco@cbs.dk
 
Suggested Citation
Per J. Agrell and Peter Bogetoft (2017), "Regulatory Benchmarking: Models, Analyses and Applications", Data Envelopment Analysis Journal: Vol. 3: No. 1–2, pp 49-91. http://dx.doi.org/10.1561/103.00000017

Published: 15 Nov 2017
© 2017 P. J. Agrell and P. Bogetoft
 
Subjects
Industrial Organization: Monopolies and Antitrust,  Industrial Organization: Regulatory Economics,  Economic Theory: Game Theory,  Performance measurement,  Econometric models,  Productivity measurement and analysis
 
Keywords
DEAAgency theoryRegulationEnergy networks
 

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In this article:
1. Introduction
2. Classical Regulatory Packages
3. Use of Regulatory Benchmarking
4. Application 1: DSO Regulation in Germany
5. Application 2: DSO Regulation in Norway
6. Application 3: International Benchmarking of Electricity Transmission
7. Summary
References

Abstract

Benchmarking methods, and in particular Data Envelopment Analysis (DEA), have become well-established and informative tools for economic regulation. DEA is now routinely used by European regulators to set reasonable revenue caps for energy transmission and distribution system operators. The application of benchmarking in regulation, however, requires specific steps in terms of data validation, model specification and outlier detection that are not systematically documented in open publications, leading to discussions about regulatory stability and economic feasibility of these techniques. In this paper, we review the modern foundations for frontier-based regulation and we discuss its actual use in several jurisdictions.

DOI:10.1561/103.00000017

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Data Envelopment Analysis Journal, Volume 3, Issue 1-2 DEA and Regulation
See the other articles that are also part of this special issue.