Controlling for environmental conditions in regulatory benchmarking
Research output: Contribution to journal › Journal article › Research › peer-review
Standard
Controlling for environmental conditions in regulatory benchmarking. / Heesche, Emil; Asmild, Mette.
In: Utilities Policy, Vol. 77, 101390, 2022.Research output: Contribution to journal › Journal article › Research › peer-review
Harvard
APA
Vancouver
Author
Bibtex
}
RIS
TY - JOUR
T1 - Controlling for environmental conditions in regulatory benchmarking
AU - Heesche, Emil
AU - Asmild, Mette
N1 - Publisher Copyright: © 2022 The Authors
PY - 2022
Y1 - 2022
N2 - Regulators often use Data Envelopment Analysis (DEA) to create a pseudo-competitive environment for sectors with natural monopolies. In this paper, we look at the characteristics of the method used by the Danish water regulator to account for differences in the companies’ environmental conditions and propose adjustments to this method. Second stage analysis reveals significant correlations between the efficiency scores and these external factors, indicating that the currently used method is insufficient. To explain this, we develop a new second stage analysis, using permutation-based approaches, where we account for the distribution of the DEA assigned multipliers.
AB - Regulators often use Data Envelopment Analysis (DEA) to create a pseudo-competitive environment for sectors with natural monopolies. In this paper, we look at the characteristics of the method used by the Danish water regulator to account for differences in the companies’ environmental conditions and propose adjustments to this method. Second stage analysis reveals significant correlations between the efficiency scores and these external factors, indicating that the currently used method is insufficient. To explain this, we develop a new second stage analysis, using permutation-based approaches, where we account for the distribution of the DEA assigned multipliers.
KW - Data envelopment analysis
KW - Environmental variables
KW - Permutation
KW - Regulation
KW - Second stage analysis
U2 - 10.1016/j.jup.2022.101390
DO - 10.1016/j.jup.2022.101390
M3 - Journal article
AN - SCOPUS:85131599057
VL - 77
JO - Utilities Policy
JF - Utilities Policy
SN - 0957-1787
M1 - 101390
ER -
ID: 325716892